M. JAVED BUTTAR, J.-- The Regular first appeal Nos. 38/1981, 39/1981 and 40/1981 are being disposed of through this single judgment as common questions of law and facts are involved in all these cases.
2. The relevant facts are that the appellants' lands measuring 48 kanals, 14 marlas (R.F.A. 38 of 1981) measuring 34 kanals, 5 marlas and 31 kanals, 16 marlas (R.F.A. 39 of 1981) and 54 kanals, 12 marlas (R.F.A. 40 of 1981) were acquired by Government alongwith other lands of 11 villages for Kamra AIR Field Project. The Land Acquisition Collector vide his award dated 20.11.1976 assessed the compensation as follows:- 1 Chahi Rs. 1644/- per kanal 2 Maira Rs. 550/- -do- 3 Rukar Rs. 275/- -do- 4 Banjar Qadeem Rs. 275/- -do- 5 Ghair Mumkin Rs. 137.5C -do- Thus a sum of Rs. 22895.05 (R.F.A. 39/1981, Rs. 12944.79 and Rs. 10656.21 (R.F.A. 39/1981) and Rs.
14650.54 (R.F.A. 40/1981) were assessed, determined and paid as value/compensation to the different appellants in these appeals.
2. The appellants challenged the determination of compensation as awarded by the Land Acquisition Collector through separate applications (references) under section 18 of the Land Acquisition Act which were sent for decision and determination to the Civil Court. The learned Senior Civil Judge, Attock vide his separately written orders passed on 25.7.1981 alongwith many other applications of other land owners rejected the applications and answered the . Hence these appeals.
3. It is contended by the learned counsel for the appellants that a wrong method has been adopted in determining the value of the land and the learned Trial Court has failed to consider that' the composite award was made though the parties and the lands acquired were different and situate in different villages. The contention has force. The Land acquisition collector had taken average price of 11 villages the area of which was acquired for the Kamra Air Field Project and this procedure was against produce and it is improbable that the utility, characteristic or fertility of the Land in all the 11 villages is or was uniforme and it is possible that the market value as determined by the Land Acquisition Collector mentioned above, does not reflect the real price of the land at the time of the acquisition.
4. We are of the view that in one village the market value of different pieces of land may be different and it all depends on the quality, classification (of the soil) fertility, location, special characteristic, if any, of the land and the use to which it can be put by the land owners. We are, therefore, of the considered opinion that the Senior Civil Judge ought to have decided the appellants' applications separately by recording evidence in each case separately for determining the market value of their lands which stand acquired.
5. In view of the above mentioned these appeals are accepted, the impugned orders passed by the Senior Civil Judge, Attock to the extent of the appellants in these appeals are set-aside and all these cases are remanded back to the Senior Civil Judge, Attock for a decision afresh within a period of three months. The learned Senior Civil Judge, Attock shall afford an opportunity to the parties to produce additional evidence, if they so desire. The parties shall appear before the learned Senior Civil Judge on 24.1.2001. As the cases are being remanded, there are no orders as to costs.
ALI NAWAZ CHOWHAN, J.-- I respectfully agree with the . Judgment of my learned brother but wish to add a further following note in this connection.
6. While giving his sermon on the 9th day of Zu/haj 10 A.H. In the Urana Valley of Mount Irfat, our Holy Prophet (peace be upon him) had inter-alia stated: "0 people, just as you regard this month, this day, this city as sacred, so regard the life and property of every Muslim as a sacred trust".
7. The Land Acquisition Act (1 of 1894), as is clear from its title and clearer still from the preamble, is a "law for the acquisition of land needed for public purposes and for Companies and for determining the amount of compensation to be paid on account of such acquisition". The raison de etre cf this piece of legislation is, therefore, two-fold: Firstly, to fulfil the needs of Government and Companies for land required by them for their projects, and secondly, to determine and pay compensation to those private persons or bodies whose land is so acquired. The exercise of the power of acquisition has been limited to public purposes. The principles laid down for the determination of compensation, as clarified by judicial pronouncements made from time to time, reflect the anxiety of the law-giver to compensate those who have been deprived of property, adequately enough in the sense that they are to be given gold for gold and not copper for gold. In other words, the compensation has to be adequate compensation. It is with this end in view that the association of the persons interested in the property, with the process of determination of its market value by the Collector is a high light of this statute. A bare reading of the Act leaves one with the strong impression that one of the main intentions of the Legislature was to ensure the protection of the rights of the persons whose property was being acquired.
8. Sections 23 and 24 of the Land Acquisition Act provided the guidelines for determination of Compensation.
9. Recurrently the superior Courts have been providing guidelines to be followed by the Collector in connection with the awards, under the Land Acquisition Act as well as for the Land Acquisition Courts sitting over references under Section 18 of the Land Acquisition Act for the purposes of determining a fair Compensation'. But these guidelines and the 'spirit behind section 23 of the Land Acquisition Act are paid scant attention. This leads-to prolonged litigation. On the other hand, influential people are benefited through payment of fat compensation then what they deserve.
Thus exercising discretion with capaciousness and arbitrariness has led to a lot of injustice and there has always been a need for structuring discretion through the case law.
10. In the case of Pakistan Barmah Shell Ltd. Vs. Province of NWFP and others. (1993 SC.MR 1700) at page 1705, the ratio laid down as under:-- "We are not persuaded 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 the 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 evidence 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 yard-stick for assessment."
11. In the case of Collector, Land Acquisition Vs. Muhammad Ayub Khan (2000 SCM R 1322) + (KL.R 2000 (Rev.) 217), it was observed that a collector has to consider the potential value and the future of the land under acquisition in addition to one year average while arriving at, a compensation to be given under the Act.
12. In the case of NWFP Vs. Haji All Asghar Khan and others, 1985 SCM R 767, it was inter alia observed that a Collector has to keep in mind the upward trends in prices of land. ,
13. The following are some of the guidelines which have been given by the superior Courts from time to time,--
(i) 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 acquire land.
(ii) Sub-Section (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.
(iii) The best method of determination of the market price of the plots of land under the acquisition is to reply on instances of sale of it near about the da te of notification under Section 4(i) of the Land Acquisition Act. The next best method is to take into consideration the instances of sale of the adjacent land 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.
(iv) 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.
(v) 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.
(vi) 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.
(vii) In determining the quantum of fair compensation the main criterion is the price which a buyer would pay to a sell& for the property if they voluntarily entered into the transaction . (viii)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 th 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 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. (x) The sale-deed and mutation entries do serve as an aid to the prevailing market value.
(xi) In cases of compulsory acquisition effort has to be made to find out whaPthe 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.
(xii) 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.
(xiii)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 betaken into consideration.
14. In this particular case, the learned Senior Civil Judge had lost sight of the criteria and the guidelines fixed by this Court for purposes of compensation in respect of each and every application because the potential of land, its future trends and its nature may differ in every case.
A composite award, therefore, was against the spirit of Section 23 of the Land Acquisition Act, and is rightly set-aside.