JAVED IQBAL. J.--This appeal is directed against the judgment dated 31-5-1999 passed by a learned Division Bench of the Lahore High Court. Lahore. Whereby Regular First Appeal preferred on behalf of respondents has been accepted and order dated 26-9-1998 passed by learned Senior Civil Judge. Khushab.Has been set aside.
2. Precisely stated facts of the case are that land measuring 35 Kanals 4 Marlas located in revenue estate of Aheerpur. Tehsil and District Khushab, was acquired by the Provincial Government to construct drain in Joharabad by WAPDA. Necessary formalities as envisaged under the Land Acquisition Act. 1894 (hereinafter referred to as 'the Act') were completed and learned Land Acquisition Collector assessed compensation by means of award bearing No,8 dated 27-3-1994 whereby compensation in tune of Rs,86.400 per acre with 15% compulsory acquisition charges was awarded. Being aggrieved_ appellant preferred an application under section 18 of the Act for enhancement of compensation which was awarded by learned Senior Civil Judge, Khushab and compensation was awarded at the rate of Rs,20,000 per Marla i,e, Rupees 3.2 million per acre as against RS.86.400 per acre awarded by the Land Acquisition Collector. The learned Senior Civil Judge, Khushab also increased compulsory acquisition charges from 15% to .That of 25% on - the amount of compensation. The respondents preferred R.F.A. Bearing No,502 of 1998 which has been accepted by learned Division Bench of the Lahore High Court, Lahore and the order of enhancement qua compensation passed by learned Senior Civil Judge, Khushab. Dated 26-91998 has been set aside hence this appeal:
3. Rana Muhammad Samar, learned ASC entered appearance on behalf of appellants and urged strenuously that legal and factual aspects of the controversy have not been examined in its true perspective which resulted in serious miscarriage of justice and caused huge loss to the appellants. It is urged with vehemence that learned Division Bench of the Lahore High Court, Lahore, has passed its conclusion on conjectural presumptions having no nexus whatsoever with the record of the case and the 'findings arrived at by learned Senior Civil Judge, Khushab after due deliberation were set aside without any rhyme and reason causing serious prejudice against the appellants. It is contended firmly that it is a case of misreading and non-reading of evidence because documentary evidence led by the .Appellants to substantiate their claim has not taken into consideration with diligent application of mind. In this regard specific reference has been made to Exh.RW A/1. Exh.R-2 (Notification dated 19-10-1991), Exh.A/2.Exh.RW/l (Letter from Land Acquisition Collector to DC/Collector Khushab dated 23-10-1991). Exh.A/3 (Notification No,172/NTO dated 10-3-1992 concerning Ward Nos.7 and 8. Nasim Colony/Town Committee, Joharabad).
Exh.A/4 (Letter dated 19-12-1993 from appellants to Land Acquisition Collector). Ex.A/5 (Notice dated 21-3-1994 regarding hearing on 27-4-1994).Ex.A/6 (Application dated 27-3-1994 submitted to the Land Acquisition Collector). Ex.A/7- (Award dated 27-3-1994). ExA/9 and Ex.A/14 (Gazette Notification dated 22-71987 whereby revenue estate Aheerpur was included in the Town Committee. Joharabad). ExA/15 (certified copy of wardwise plan of Town Committee Joharabad), Ex.A/16 (specified statistical data record of the Local Council Action 1991), Ex.A/I 8 (Lease Deed dated 20-6-1993) and Ex:A/19 (Lease Deed dated 31-12-1992 executed prior to the issuance of notification under Section 4 of the Act). It is argued that statements ofa ppellants were neither challenged nor rebutted and amounts to admission which aspects of the matter escaped notice of the learned High Court. It is pressed time and again that land in question is situated in Wards No, 7 and 8 in Nasim Colony within the limits of Town Committee. Joharabad on the basis whereof compensation has rightly been determined by learned Senior Civil Judge, keeping in view all the potential values of the land in question. It is contended that land requisition charges could not have been reduced from 25% to that of 15% as the land has been acquired for WAPDA which is not to be utilized by the Provincial Government.
4. Sh. Zamir Hussain learned Advocate Supreme Court appeared on behalf of respondents and supported judgment impugned for the reasons enumerated therein with further submission that land in question is agricultural in nature and moreso it is not part of Town Committee. Aheerpur. It is contended that Ex.A/14 and Ex.A/15 cannot be considered for the purpose of compensation which were mainly issued for election purposes.
5. We have carefully examined the respective contentions as agitated on behalf of appellants and for respondents in the light of relevant provisions of law and record of the case. We have thrashed out the entire evidence with eminent assistance of learned counsel. We have also gone through the award dated 27-3-1994 made by the Land Acquisition Collector, order dated 26-9-1998 passed by learned Senior Civil Judge. Khushab as well as judgment impugned. After having gone through the entire record. We are of the considered opinion that learned Senior Civil Judge had announced compensation on extraneous consideration by ignoring the ground realities and settled norms of justice and precedent law on the subject. It must not be lost sight of "that the scheme of Land Acquisition Act is that the power of the owner of the land to be acquired to deal with it comes to an end after the publication of the notification under S.4 and it is the market-value of such land on the date of the publication of the notification under section 4 that is the measure of compensation to be awarded to the owner. In this context it is to be noted that under the Land Acquisition Act the market value which has to be determined for purposes of compensation includes estimates of actual speculative advance in the values of lands in consequence of improvements, already made in the locality or in consequence of potentialities for any purpose." (Qazi Nazir Ahmed v Azad Jammu &Kashmir GovernmentPLD 1964 AJ&K 21 (DB) and YeshwantraoGovindrao v The Collector Nagpur AIR 1961 Bom.129).
6. This Court has elaborately discussed the question of determination of market value of the land acquired for the public purpose under the Land Acquisition Act In case titled Murad Khan v. Land Acquisition Collector Peshawar (1999 SCMR 1647), relevant portion whereof is reproduced herein below for ready reference:-
(i) The date from which the market value of the land can beestimated is given in rule 13 of the North-West Frontier Province Circular No754 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 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 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 (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(1) of the Act.
The next best method is to take into consideration the instance 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 neighboring locality. The potential value of the land need not be separately awarded because such sales cover the potential value. (Jogendra Nath Chatter* and others v. State of West Bengal AIR 1971 Calcutta 458). Underling 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 Bangar 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. (Paksitan and another v. Rehmdad 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 Mukhtiakar. 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 PLD1978 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 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 theprice 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 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 Saud 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.
Sarclar 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 determination but its potential value must be taken into consideration. The value may also be determined by capitalizing the rent. -(Abdul Wahid and others v. The Deputy Commissioner 1986 MLD 381, Nisar Ahmad Khan v. Collector. Land Acquisition PLD 2002 SC 25)."
7. It is worth mentioning that the Land Acquisition Collector while determining the compensation of acquired land is required to consider the potentialities and future, prospective of land in addition to one year average. In this regard reference can be made to Muhammad Saeed v. Collector Land Acquisition (PLJ 2001 SC 1373) wherein it was held as follows:-- -5, It is settled law that while determining amount of compensation, Court is to consider evidence brought on the record by the parties and further Land Acquisition Collector while determining compensation of acquired land has also to consider the potentiality and future prospective of land in addition to one year average. Reference may be made to (i) Land Acquisition Collector/Deputy Commissioner. Abbottabad and others v. Sardar Muhammad Safdar Khan and others (1998 SCMR 2142). (ii) Collector. Land Acquisition, Mardan and others v .Navtabzada M. Ayub Khan and others (2000 SCMR 1322).(iii) Sardar Abdur Rauf Khan and others v.The Land Acquisition Collector/Deputy Commissioner.Abbottabad and others (1991 SCMR 2164). (iv) Deputy Commissioner/Land Acquisition Collector and others v. Sardar Muhammad Shafqat and others (PLD 2001 SC 405). (v)
Land Acquisition Collector and others v. Dina and others (1999 SCMR 1615). (vi) Murad Khan through his widow and 13 others v. Land Acquisition Collector.Peshawar and another 1999 SCMR 1647 and Fazal Haq College v. Said Rasan PLD 2003 SC 480.-
8. It is however to be kept in view that small and big plots cannot be considered of the same value as in the big chunk of land certain amenities are not provided while the small plots are meant for construction having all the relevant facilities and. Therefore. The same fetch more price as compared to that of big chunk of land. We are therefore, not persuaded to agree with learned ASC on behalf of appellants that the price fixed for small plots meant for residential construction should be awarded to the land in question. In this regard, reference can be made to the case titled Collector of Karachi v. M.N.E. Dinsbaw (PLD 1965(W.P. Kau) 557).
9. The case of the appellant has been examined on the touchstone of criterion as discussed herein above. We are of the view that no injustice has been done to the appellants and a fair amount has been paid as compensation. It is quite amazing that appellants had prayed for Rs,15.000 per Marla while learned Senior Civil Judge by showing undue indulgence and extraordinary generosity enhanced the amount from Rs,15.000 to Rs,20.000 per Marla which is in violation of provisions as contained in Section 25(1) of the Act_ We are not convinced that the documentary evidence has not been examined in its true perspective by the learned High Court for the simple reason that relevant portion of the judgment impugned negates the said version which is reproduced herein below for ready reference:-
5. We have gone through the record with the assistance of the learned counsel for the parties. A perusal of the impugned award reveals that the learned Senior Civil Judge has heavily relied on documents Ex:A-2, A-3, A-9, A-I4. A-17, A-18, and A-19, while enhancing the compensation to the amount awarded by him. These documents need to be examined closely. Ex.A-2 which comprises of three pages has been dubbed as a report by the Deputy Commissioner Khushab suggesting fixation of compensation at the rate of Rs:16.039,88 per Marla, in the impugned award and the learned counsel for the respondents also insists that this document indeed is such a report. To begin with the Deputy Commissioner Khushab addressed letter dated 29-10-1991 to Tehsildar Khushab informing him of the proposed acquisition of the land and asking to send a statement of the average of sale price of land in village Aheerpur on the basis of transaction preceding 12 months of the date of the preliminary notification. The opinion of the Tehsildar was also solicited as to the market price of land. There is a note on this letter that the Circle Patwari was asked by the Tehsildar to prepare one year average. It appears that a lot of deliberation took place and there is a note on the second page of the document by the Tehsildar dated 16-4-1992 that one year average is being sent. However, this latter document is not available on the record, as it was not produced by any of the parties. Another note dated 22-4-1992 appears on the said second page whereby the matter was again referred back to the Tehsildar, as according to the said note there was only one mutation entered and attested during the relevant period on the basis whereof, the said average was prepared. This time the matter landed with a Girdawar, who sent a report that he had prepared as average on the basis of transactions in contiguous Chak according to which the average price come to Rs:16,039.88 per Marla. Tehsildar fully agreed with this report and forwarded it to the Assistant Commissioner. There is nothing on record to show as to whether the report was in fact sent to the Assistant Commissioner and consequently to the Deputy Commissioner and if so whether the Deputy Commissioner approved it or not. In the absence of the said material it cannot be said that it was the Deputy Commissioner who fixed or approved the compensation at the said rate. This document, therefore, has clearly been misread. The next document relied upon is Ex.A.17.
According to the learned Senior Civil Judge this document constitutes evidence of the facts that some plots were auctioned by District Housing Committee Khushab at the rate of Rs,16,000 to 35,000 per Marla. We find that in the first instance the auctions mentioned in this document was held on 22-3-1994, which is a date after publication of preliminary notification. We have examined this document carefully and are unable to see as to how it supports the said findings of the learned Senior Civil Judge. The document as it contains the names of the highest bidders, the number of plots, size of the plot and amount of highest bid received against each plot. Not a single entry of this document tends to show that the bid offer was at the rate suggested by the respondents and believed by the learned Referee Court. We are again constrained to hold that the document has been misread by the learned Senior Civil Judge. This leaves the sale-deeds Exhs.A-18 and A-19.
Exh.A-18 is executed on 20-6-1993 and registered on 21-6-1993.According to this document a well defined plot being served by a street at one side and a road on other side measuring 5 Marlas in Nasim Colony was sold for Rs,100,000. Ex.A-19 evidences a sale of 4 Marlas plot again being served by a metalled road on one side and a street on the other side in the same colony for Rs,60,000. This document was executed on 31-12-1992 and registered on 2-1-1993. Both these documents came into existence after the issuance of notification under section 4 of the said Act. These are liable to be excluded from consideration on this short ground alone. It may further be added here that while dealing with the matter of assessme nt of compensation for a large parcel of land, the value of a small plot and particularly of the nature apparently sold through Exhs.A-18 and A-19 are not relevant at all. It is a matter of common knowledge that while setting up Housing Colony a large percentage of land has to be reserved for providing utilities and thereafter expenses are incurred on development like providing roads, lanes, sewerage etc. A plot in a housing scheme is not valued only as a piece of land but is subject to all these considerations which are there when the price is fixed by a land developer. Similarly, the person who pays the price also agrees to pay the same in view of or at least in expectation of all the said facilities. We are not therefore, inclined to rely upon these two documents as a safe criteria to assess the market value of the land in question. We have already noted above that the mutation and the alleged one year average referred to in document Exh.A-2 have not been placed on record. Reference may also be made to document Exh.A-19 (Exh.A-14 is copy of the same document). According to this document it was notified by the Provincial Government on 22-7-1987 that revenue estate of Aheerpur stands included in the area of Town Committee, Joharabad. Exh.A-3 is a Notification dated 10-3-1992 issued under section 27-A of the Stamp Act, 1899. According to AW-1, the land in question is located in Ward No,8, Town Committee Joharabad. According to the said valuation table land in this ward abutting on the road has. Been valued at Rs,12,000 per Marla. We find in the Notification Exh.A-3 the area in respect whereof valuation has been made is described with reference to Mohallah or some public building.
We do not find the mutation of Aheerpur or for that matter Nasim Colony under area described in any of the wards in the said Notification. The same is therefore of not much help in the matter."
10. It is stressed time and again that the land in question has been merged in residential area and accordingly, compensation should be awarded by taking into consideration the prevailing price of the residential area which is not correct because it is an admitted feature of the case that land in question is agricultural one and therefore, it was selected for the construction of Joharabad drain.
Had it been residential area, the question of such selection would have not been arisen. Besides that as mentioned in the preceding paragraph, the big chunks of land cannot be compared with smaller plots of a housing scheme which provide all the amenities and hence it becomes more valuable. There is no denial the fact that the land in question was acquired for construction of Joharabad drain which could not have been constructed in the residential area and basic object whereof was to enhance the potential value of the agricultural land by protecting it from water logging and salinity which is not the problem of residential area. The land acquired was admittedly agricultural in nature and is not part and parcel of Wards Nos.7 and 8 of Town Committee, Joharabad and its inclusion in Town Committee Joharabad in a particular election constituency would neither change its nature nor value. In such view of the matter Notification dated 19-7-1987 issued by the Government of the Punjab Local Council and Rural Development Department, Punjab, Lahore, would not render any assistance to the case of appellants.
11. In sequel to the above mentioned discussion, the compensation as awarded by the Land Acquisition Collector by means of award dated 27-3-1994 being unexceptionable does not warrant interference. Besides that all the points agitated while arguing the appeal have been considered and dilated upon by the learned Division Bench of the Lahore High Court, Lahore, in the judgment impugned. No illegality or infirmity could be pointed by the learned Advocate Supreme Court. The conclusion as arrived at by the learned Division Bench of the Lahore High Court, Lahore, being well based does not warrant interference. The appeal being devoid of merit is dismissed with no order as to costs.