' IRSHAD HASAN KHAN, C.J.---Through this common judgment we propose to dispose of Civil Petitions Nos. 282 to 292 of 1999 arising out of a consolidated judgment dated 10-2-1998 passed by a Division Bench of the Lahore High Court in R.F.As. Nos. 286 and 338 to 347 of 1993, declining to interfere with the assessm ent of compensation fixed by the Referee Court.
C.P.282 of 1999
2. The respondents owned 1332 Kanals, 9 Marlas of land situated in villages Shamasabad, Sahiba, Kamala and Veero of Tehsil Attock, which was acquired by the Land Acquisition Collector, Attock (hereinafter referred to as the Collector) for the purpose of extension of residential Colony of Kamra Rebuild Factory through award dated 31-3-1991.
3. The price of Chahi, Maira and Ghair Mumkin land was fixed as Rs,18,664, Rs,9,124.08 and Rs,2,281.02, per Kanal respectively. The possession of the land was taken on 1-8-1990. The award was announced on 18-11-1991 with 15% compulsory compensation charges and 8% compound interest from 1-8-1990 to 15-11-1991.
4. The respondents being dissatisfied with the above price of the land, preferred a Reference under section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as the Act) before the Senior Civil Judge, Attock. The Referee Court vide judgment dated 21-3-1993, on the basis of the evidence on record, determined the market value of Maira land as Rs,61,179 and Ghair Mumkin land as Rs,15,295 per Kanal. The respondents were also allowed 15% compulsory acquisition charges along with 8% compound interest.
C.Ps. 283 to 292 of 1999
5. The land measuring 1074 Kanals 19 Marlas owned by the respondents situated in villages Shamasabad, Sahiba, Kamala and Veero of Tehsil Attock, was acquired by the Collector for the purpose of construction of residential colony and Kamra Complex. The land was categorized as Maira and Ghair Mumkin. The land measuring 880 Kanals, 12 Marlas was located in village Shamasabad, whereas the remaining land formed part of villages Sahiba and Kamala.
6. The possession of the land was obtained on 26-11-1991. The award was announced by the Collector on 16-6-1992, 'fixing the price of Maira at the rate of Rs,15,959.20 and of Ghair Mumkin at the rate of Rs,3,989.80 per Kanal.
7. Being aggrieved, the respondents filed separate References under section 18 of the Act before the Senior Civil Judge, Attock claiming market value of the land.
8. The learned Referee Judge, vide a common judgment dated 9-5-1993, determined the market price of different kinds of land and enhanced the rate of compensation for Maira to Rs,61,179 per Kanal, Ghair Mumkin to Rs,15,295 per Kanal with 15% compulsory charges and 8% compound interest.
9. The acquiring agency along with other petitioners being dissatisfied with the judgments and decrees of the learned Senior Civil Judge, preferred appeal before the Lahore High Court questioning the validity of the market price determined by the Referee Judge.
10. A learned Division Bench of the Lahore High Court, Rawalpindi Bench, vide the impugned common judgment dated 10-2-1998, upholding the judgments and decrees dated 21-3-1993 and 9-5-1993 of the learned Senior Civil Judge, dismissed the appeals and directed the petitioners to deposit excess amount of compensation to be paid to the respondents-claimants within a period of three months. The Province of Punjab/ Petitioner has now filed this petition for leave o appeal.
11. Sheikh Zamir Hussain, learned ASC for respondents Nos.2 to 10 has placed reliance on Water and Power Development Authority through Chief Engineer v. Saadullah Khan and others (1999 SCM R 319) to contend that under section 54 of the Act a direct appeal lies to the Supreme Court and even if the present petitions are treated as appeals the same would be out of time, in that, period of limitation prescribed for a direct appeal is 30 days, and 60 days for filing of petitions for leave.
The preliminary objection seems to be valid. On the last date of hearing as well the learned Standing Counsel for the Government of Pakistan requested for a short adjournment to consider the implication of the preliminary objection but no satisfactory explanation has been given by Mr.Imtiaz Muhammad Khan, learned AOR for the petitioner to meet the above preliminary objection. The above petitions are liable to be dismissed on this short ground alone.
12. Be that as it may, we have heard Mr.Imtiaz Muhammad Khan, learned AOR for the petitioner, Sheikh Zamir Hussain, learned ASC for respondents Nos.2 to 10 and Mr. Bashir Ahmad Ansari, learned ASC for respondents Nos. 11, 14 to 16 and Engineer Jamil Ahmad Malik, respondent No,1.
13. The learned Judges of the Division Bench after thorough scrutiny of the evidence on record took the view that the Land Acquisition Collector overlooked the potential value of the land to be used for residential purpose as well as its location in assessing the correct value of the land and fixed its price arbitrarily in disregard of the well-established principle laid down by the superior Courts for ascertaining the market value of the land to be acquired. The learned Judges were right in holding that the Collector had erred in relying on the circular of the Board of Revenue simpliciter while assessing the price without determining the market value in conformity with the well-established principles laid down for the purpose. It would be advantageous to reproduce paragraph 10 of the impugned order which reads thus :-- "10. The cardinal principle for ascertaining the value of the land under acquisition is to find out the price acceptable to a willing seller from a willing purchaser. Attending this principle, we notice that the rate of compensation given by the Referee Court being much-less to that of the claim made by the owners was not exorbitant and, therefore, taking the relevant factors into consideration, the rate of compensation awarded by the Referee Court was fair. Undoubtedly, there is no rule that a post notification transaction of sale of similar land cannot be looked into to find out the correct value of the land, but it is seen that after publication of the notification under section 4 of the Land Acquisition Act, 1894, the price of the land in the locality is affected and, therefore, to place reliance on such a transaction of sale will not be a proper guidance for the determination of the market value of the acquired land. However, in the present case, the collector or the Referee Court did not include any such transaction for the purpose of calculation of the market value of the land and, therefore, the determination of the market value of land acquired by the Referee Court on the basis 'of the documentary evidence of the mutations of sale along with the other factors was supported by cogent reasons."
14. Reference may also be made to Pakistan Burma Shell Ltd. v. Province of N.W.F.P. And 3 others (1993 SCM R 1700) and Haji Muhammad Yaqoob and another v. Collector, Land Acquisition/ Additional Deputy Commissioner, Peshawar (1997 SCM R 1670).
' In the case of Pakistan Burma Shell (supra) this Court observed as under:-- "6. We are not pursuaded to strike off the award on the rectitude of these submissions, section 23 makes mention of various matters to be considered in determining the compensation. One of such factors enumerated therein is that the date relevant for determination of market value is that date of the notification under section 4. Not unoften the market value has been described as what a willing purchaser would pay to the willing seller. It may be observed that in assessing the market value of the land, its location, potentiality and the price evidenced by the transaction of similar land at the time of notification are the factors to be kept in view. One year's average of the sales taking place before the publication of the notification under section 4 of similar land is merely one of the modes for ascertaining the market value and is not an absolute yardstick for assessment."
15. The above principle was also quoted with approval in the case of Haji Muhammad Yaqoob (supra) wherein it was observed that it is well settled that one year's average sale price of the land in the vicinity preceding the date of notification under section 4 of the Act, is only one of the relevant factors for consideration in determining the market value of the land but it alone cannot be adopted as the basis for assessme nt of market value, if there is other evidence available on record to establish the potential value of acquired land at a higher rate.
16. In the case of Province of Punjab through Collector, Bahawalpur and others v. Col. Abdul Majeed and others (1997 SCM R 1692), the following principles of law were laid down for assessing the future prospects of the land acquired under the Land Acquisition Act, 1894 in terms of section 23:
(i) That an entry in the Revenue Record as to the nature of the land may not be conclusive, for example, land may be shown in Girdawari as Maira, but because of the existence of a well near the land, makes it capable for becoming Chahi land.
(ii) That while determining the potentials of the land, the use of which the land is capable of being put, ought to be considered.
(iii) That the market value of the land is normally to be taken as existing on the date of publication of the notification under section 4(1) of the Act but for determining the same, the price on which similar land situated in the vicinity was sold during the preceding 12 months and not 6-7 years back may be considered including other factors like potential value etc .
17. The above principles were also consistently followed in Abdur Rauf Khan v. Land Acquisition Collector (1991 SCM R 2164), Gunj Khatoon v, Province of Sindh (1987 SCM R 2084), Fazalur Rahman v.
Collector (PLD 1988 SC 32) and Pakistan Burma Shell Ltd. v. Province of N.-W.F.P. (1993 SCM R 1700).
18. Reference may also be made to Murad Khan through his widow and 13 others v. Land Acquisitio n Collector, Peshawar and another (1999 SCM R 1647), wherein one of us (Muhammad Bashir Jehangiri, J.) had exhaustively laid down the criteria for determination of fair compensation.
Relevant portion of the report reads thus:-- "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. Section 23 of the Land Acquisition Act, 1894 lays down, by way of criterion, that 'market value' of land on the date of publication of notification under section 4 of the said Act would be the amount of compensation,. The expression 'market value' has not been defined in the Act.
' 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 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.
' It is wrong to look for the classification alone of the land for the purpose of determination of the fair compensation.
' 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.
(ii) The best method to work out the market value is the practical method of a prudent man laid down in Article 2, Qanun-e-Shahadat, 1984 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.
(iii) Subsection (1) of section 23 of the Land Acquisition 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 Collector's taking possession of the land. This, however, is not exhaustive of other injuries or loss which may be suffered by an owner on account of compulsory acquisition.
(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(1) of the Land Acquisition 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.
(v) 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 Banjar Qadeem or Barani but its market value may be tremendously high because of its location, neighborhood, potentiality or other benefits.
(vi) While determining the value of the compensation the market value of the land at the time of requisition / acquisition and its potentiality has to be kept in consideration.
(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.
(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.
(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 Court has 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.
(ix) 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 that 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 question, 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.
(xi) The sale-deed and mutation entries do serve as an aid to the prevailing market value.
(xii) 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.
(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.
(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 Pot 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 ."
19. In the instant case, the impugned order passed by the High Court for enhancing the compensation was in accord with the well-established principles laid down for determination of fair compensation as highlighted in the judgment of this Court referred above.
20. The objection was also raised that the Court could only direct the Collector to pay simple interest on enhanced compensation at the rate of 6 per centum per annum of the land to the date of payment in the Court and not 8 per centum per annum. It was argued that payment of compound interest on enhanced compensation at the rate of 8 per centum per annum was ultra vires of section 28 of the Act.
21. The above contention is devoid of any force. Section 28 of the Act in its application to the N.- W.F.P. Was amended by section 2 of N.-W.F.P. Ordinance 5 of 1983, whereby the Court could direct the Collector to pay simple interest on excess compensation at the rate of 6 per centum per annum. However, no such amendment was made in the case of Punjab. On the contrary, vide section 2 of the West Pakistan Act No, 3, 1969, in section 28, for the words "interest on such excess at the rate of six per centum" the words "compound interest on such excess at the rate of eight per centum" were substituted and the following proviso was added at the end :-- "Provided that in all cases where the Court has directed that Collector shall pay interest on such excess at the rate of six per centum from the date on which possession was taken and the payment of compensation or a part thereof has not been made up to the commencement of the Land Acquisition (West Pakistan Amendment) Act, 1969,. The rate of compound interest on such excess or balance shall be eight per centum."
22. Section 34 of the Act provides that when the amount of such compensation is not paid or deposited on or before taking possession of the land, the collector shall pay the amount awarded with interest thereon at the rate of six per centum per annum from the time of so taking possession until it shall have been so paid or deposited. However, vide section 2 of West Pakistan Act No, 3, 1969, in its application to Punjab for the words "interest thereon at the rate of six per centum" the words "compound interest at the rate of eight per centum" have been substituted.
23. Reliance is also placed on the case of Government of Sindh and 2 others v. Syed Shakir Ali Jafri and 6 others (1996 SCM R 1361) at page 1368, wherein it was observed:- "Section 34 applied when the amount of compensation 'is not paid or deposited on or before taking possession of the land'. In that case the Collector 'shall pay the amount awarded with interest thereon at the rate of six per centum per annum from the time of so taking possession until it shall have been so paid or deposited'. Section 28 enacts that "if the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of six per centum per annum from the date on which he took possession of the land to the date of payment of such excess into Court ."
24. Resultantly, we do not find any legal flaw or error with the well-reasoned judgment of the High Court warranting interference. Accordingly the petitions are dismissed being barred by time as well as on merits.