Stereo. H C J C A 38.
Judgment Sheet
IN THE LAHORE HIGH COURT AT LAHORE
JUDICIAL DEPARTMENT
Regular First Appeal No.364 of 2007
Land Acquisition Collector Gujranwala etc
Versus
Sardar Asghar Ali
JUDGMENT
Date of hearing
20.3.2014
Appellants
represented by:
Mr.Ali Masood Hayat Advocate
Respondents
represented by:
Mr.Muhammad Jahangir Asif Advocate
ABDUS SATTAR ASGHAR J:- This regular first
appeal under section 54 of the Land Acquisition Act 1894 (to be
called hereinafter as the ‘Act’) and RFA No.365/2007, RFA
No.366/2007,
RFA
No.367/2007,
RFA
No.368/2007,
RFA
No.369/2007, RFA No.370/2007 and RFA No.371/2007 arise out of
the same judgment and decree dated 11.6.2007 passed by learned
Senior Civil Judge Gujranwala on respective references under section
18 of the Act. With this composite judgment we intend to decide all
the above mentioned appeals.
2.
Land Acquisition Collector Gujranala, District Officer
(Revenue) Gujranwala and Board of Intermediate and Secondary
Education Gujranwala through its Chairman appellants of RFAs No.
364 to 367 of 2007 will be called hereinafter as the ‘appellants’.
Sardar Jahanzaib Ali and others appellants of RFAs No.368 to 371 of
2007 will be called hereinafter as the ‘respondents’.
3.
Brief facts leading to these regular first appeals are that
vide notification dated 14.1.1986 issued under section 4 of the Act
respondents’ land total measuring 123 kanals 5 marlas was acquired
Regular First Appeals No.364/2007
2
by the Government for the Board of Intermediate and Secondary
Education Gujranwal. Award was announced on 29.10.1987 and
compensation of the land was assessed @ Rs.2193.18 per marla.
Respondents being dissatisfied with the said assessment filed
objections before the Land Acquisition Collector (appellant No.1)
who made the reference under section 18 of the Act to the Court of
competent jurisdiction i.e. learned Senior Civil Judge Gujranwala.
The learned Referee Court after framing consolidated issues and
recording of the evidence of the parties dismissed the references vide
consolidated judgment dated 28.4.1999. Being aggrieved respondents
assailed the judgment dated 28.4.1999 before this Court through
RFAs No.470 to 473 of 1999 which were accepted by this Court vide
judgment dated 04.4.2005 and the cases were remanded to the learned
Referee Court in the following manner:“-----It is thus evident that a single factor of average sale price of
the preceding year is not the sole consideration for assessing the
fair compensation. The learned Senior Civil Judge, while
deciding the references in particular issue No.3 though noted the
location of the land that it was situated at Sialkot Bypass and the
“land was a sort of urban agricultural land” has adopted the
assessment made by the Land Acquisition Collector who followed
the formula of average sale. The appellants thus are justified in
their grievance that whereas they have been deprived of their
valuable land, fair and proper compensation has not been paid to
them and that the evidence that was produced by them has not
been considered and given due weight by the reference Court. We
find substance in the contention of the learned counsel for the
appellants in this regard and observe that the court appear to
have acted oblivious of the considerations which were germane
for deciding the matter of assessment of due compensation of
acquired land. G.T. (Grand Trunk) road runs along the land in
dispute which is situated around the Sialkot Bypass and
admittedly fall within the urban limits of Gujranwala. All such
factors had to be kept in view while deciding the reference but we
find that the learned Judge fell into error in not adverting to
these aspects. He was required to make an objective assessment
on appraisal of the evidence in order to determine the fair
compensation of the land. The judgment impugned is thus not
sustainable in law, which proceeds on erroneous premises.
Therefore, following the course which was adopted by a learned
Division Bench of this Court in Province of Punjab, Lahore and
Regular First Appeals No.364/2007
3
another Vs. Shah Rasool and 3 others (1992 CLC 67), while
accepting the appeal and setting aside the impugned judgment we
remand the case to the learned Senior Civil Judge, Gujranwala
for decision of the reference afresh in accordance with law
keeping in view all the relevant circumstances as highlighted in
the precedents mentioned above and made determination of the
compensation afresh.
The appeal is accepted with the above observations with
no order as to costs.”
In post-remand proceedings after providing opportunity
of evidence and hearing to the parties the learned Referee Court vide
impugned judgment and decree dated 11.6.2007 enhanced the
compensation @ Rs.5500/- per marla instead of Rs.2193.18 per marla
assessed in the award by the Collector. Both the parties being
aggrieved of the impugned judgment and decree have preferred these
appeals.
4.
Learned counsel for the appellants argues as under:i)
that the impugned judgment and decree is based on
misreading
and
non-reading
of
evidence
and
misapplication of law;
ii)
that as per section 23 of the Act the market value of the
land at the day of publication of notification under
section 4 is relevant for determining the amount of
compensation to be awarded for the land acquired
therefore notification (Exh.P1) issued by Deputy
Commissioner Gujranwala on 21.9.1987 notifying value
of the land for compensation of advolurm stamp duty in
terms of section 27-A of the Stamp Act 1899 in various
areas and localities in Gujranwala District is neither
relevant nor the same could be considered for
determining the amount of compensation for the land
acquired;
Regular First Appeals No.364/2007
iii)
4
that sales incorporated in the mutations (Exh.P4 to
Exh.P14) pertains to small pieces of land which are
situated in Ghair Mumkin Abadi whereas respondents’
land acquired by the Government is large tract of land;
that respondents have also not been able to bring any
evidence on the record to indicate that the land acquired
was residential area;
iv)
that the compensation @ Rs.2193.18 per marla in the
Award dated 29.10.1987 was rightly assessed by Land
Acquisition Collector appellant No.1 on the basis of
average sale price of previous one year; that potential
value of the property cannot be ascertained on the basis
of oral assertion of the owners/respondents in the absence
of any reliable corroborative ocular or documentary
evidence; that the impugned judgment and decree dated
11.6.2007 enhancing the rate of compensation to the tune
of Rs.5500/- per marla suffer from factual and legal
infirmities and being untenable is laible to set aside.
5.
On the other hand learned counsel for the respondents
being dissatisfied with the quantum of enhanced rate of compensation
@ Rs.5500/- per marla vehemently contended as under:i)
that the same is meager and not justifiable as market
value and potential value of the land acquired; that the
learned Referee Court has determined the rate of
Rs.5500/- per marla without considering the value of
adjacent land shown in the transactions/mutations
(Exh.P4 to Exh.P14);
ii)
that determination of the compensation at the rate of
Rs.5500/- through the impugned judgment and decree is
highly
arbitrary,
capricious,
unfounded,
without
appreciation of ocular and documentary evidence in its
Regular First Appeals No.364/2007
5
true perspective and not in accordance with the settled
principles of determination of fair compensation as laid
by the Superior Courts;
iii)
that the learned Referee Court despite taking notice of
insufficiency of the compensation awarded by the Land
Acquisition Collector (appellant No.1) has failed to reach
at
a
just
conclusion
for
determination
of
fair
compensation of the land acquired resulting into
miscarriage of justice;
iv)
that the learned Referee Court has also lost sight of the
relevant principles and factors for considering the market
value and future potentiality of the land acquired and has
based its calculations on whims in pick and choose
manner;
v)
that as per copies of mutation (Exh.P4 to Exh.P14)
average sale price of the land situated in the same locality
comes approximately to the rate of Rs.18000/- per marla;
vi)
that the learned Referee Court while passing the
impugned judgment and decree granting the enhanced
rate of compensation @ Rs.5500/- per marla has
altogether ignored the observations made by this Court in
its remand order dated 04.4.2005 for awarding fair
compensation;
vii)
that the impugned judgment and decree suffering from
factual and legal infirmities based on non-reading and
misreading of evidence available on the record being
untenable is liable to set aside.
6.
Arguments heard. Record perused.
7.
At the outset it may be expedient to note that according
to the well settled principles while determining the value of the
Regular First Appeals No.364/2007
6
compensation the market value of the land at the time of acquisition
and its potentiality have to be kept in consideration. 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 and the time of the Collector’s
taking possession of the land. The best method to work out the market
value is to examine and analyze all the material and evidence
available on the point and to determine the price which a willing
purchaser would pay to the willing seller of the acquired land. The
other method is to take consideration the instance of sales of the
adjacent lands made shortly before and after the notification under
section 4(1) of the Act. 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. While determining the value of the land acquired by the
Government only past sale should not be taken into account but value
of the land with all its potentiality may also be determined by
examining the witnesses deemed appropriate by the Court if
necessary.
8.
The Hon’ble Apex Court in its judgment in the
case of Province of Sindh through Collector of District Dadu and
others Vs. Ramzan and others (PLD 2004 Supreme Court 512) has
sufficiently explained the terms ‘market value’ and ‘potential value’
with reference to section 23 of the Act. The relevant extract from the
said judgment reads below:“7.
The most important aspect qua the lands compulsorily acquired
is, that the mandatory returns proposed to be given to the landowner is
the compensation and not the market value. Very section 23 provides
for various matters to be brought under consideration while
determining compensation. Market value is only one of such matters to
Regular First Appeals No.364/2007
7
be considered by the Collector or Courts. Compensation is a very wider
term indicating that the landowners, for various reasons, is to be
compensated and not merely paid the price of land which is just an
interaction of supply and demand fixed between the willing buyer and
willing seller.
8.
Section 23 was subsequently amended through West Pakistan
Ordinance 49 of 1969 whereby the ambit of matters to be considered
was widened and it was in this background that the Courts in the
country emphasized the phenomenon of potential value of the land.
This term potential value is only a one word used for the future uses
which the land can be put to. In Malik Aman‟s case (PLD 1988 SC 32)
this Court had explained the feature of potential value and had
differentiated the same from the term „market value‟. It was held that
market value was normally to be taken as one existing on the date of
Notification under section 4(1) of the Land Acquisition Act under the
principle of willing buyer and willing seller while the potential value
was explained to be one to which the similar lands could be put to any
use in future. Factors for determining compensation of land are not
restricted only to the time of the aforesaid Notification but can also
relate to period in future and that is why in a large number of cases the
„potential value‟ has been held to be a relevant factor.”
9.
In this case Sabir Hussain (PW-2) Head Clerk office of
the Land Acquisition Collector Gujranwala in his statement
categorically stated that statement of average sale price on the basis
whereof compensation was awarded does not bear clarification of
urban and rural land and that location of acquired land was also not
considered at the time of preparation of statement of average sale
price. The learned Referee Court while discussing the evidence with
regard to issue No.3 and taking into consideration sale price of various
mutations sanctioned during the period of one year before the
Notification under section 4 of the Act concluded that market value of
the land at the time of Notification under section 4 of the Act was in
between Rs.5,000/- to 6,000/- per marla.
10.
Muhammad Azam Patwari (PW-3) while appearing in
the witness box stated that land acquired is situated inside the bypass
road and fall within the limits of Municipal Corporation. To fortify the
above said location of the land acquired he has also produced copy of
Aks-shajra of bypass road (Exh.P3). It therefore reveals that acquired
land was urban agricultural land at the time of acquisition. In the case
Regular First Appeals No.364/2007
8
of Murad Khan Vs. Land Acquisition Collector Peshawar (1999
SCMR 1647) the Hon’ble Apex Court has clearly manifested that 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. In this case it is evident that learned Referee Court candidly
noticed that at the time of fixation of compensation future potential
value has not been taken into consideration by the Collector. The
learned Referee Court however while enhancing the compensation to
the rate of Rs.5500/- per marla itself mainly considered the factors of
average sale price of the preceded year without taking into
consideration the potential value of the land but the mainly considered
the factors of average sale price of the preceding year while enhancing
the compensation to the rate of Rs.5500/- per marla without taking
into consideration the potential future value of the land. Respondents
therefore have justified their grievances that fair and proper
compensation has not been awarded to them by the learned Referee
Court and that ocular and documentary account available on the
record is not given due weight. It has been settled by the Hon’ble
Apex Court that factors of market value is not the sole consideration
for assessment of the compensation rather other related matters like
price of adjacent, future utility and potentially of the land proposed to
be acquired and price which a willing purchaser would pay to willing
seller are relevant factors for assessment of the compensation.
Notification dated 14.1.1986 under section 4 of the Act clearly
manifested purpose of acquisition i.e. construction of offices, mosque,
model
school,
auditorium,
guest
house,
residence
for
the
officers/officials, separate hostel, for girls and boys, a cafeteria, bank,
hostels for the indoor games, swimming pool and play grounds for the
male and female, outdoor tournaments for the Board of Intermediate
and Secondary Education Gujranwala which is indicative of its utility
and potentiality. Admittedly the acquired land is situated on the
bypass road which was an urban area falling within the municipal
limits of Gujranwala. Keeping in view the location, proximity, future
Regular First Appeals No.364/2007
9
utility and potentiality of the land acquired we are of the considered
view that enhanced rate of Rs.5500/- per marla fixed by the learned
Referee Court cannot be termed as fair compensation of the land to
the respondents/land owners rather the same is highly inadequate.
Since the matter is lingering on for the last about 28 years and the
respondents/land owners have faced painful hazards of prolonged
litigation therefore we are not inclined to remand the case once again
to the learned Referee Court. Taking into consideration the ocular and
documentary evidence produced by the parties available on the record
and in view of the future utility and potentiality of the land acquired
we consider it appropriate to enhance the rate of compensation to the
tune of Rs.7500/- per marla as fair compensation of the land acquired
from the respondents.
12.
With this modification in the impugned judgment and
decree dated 11.6.2007 the above noted appeals No.368 to 371 of
2007 filed by respondents are partly allowed and the appeals No.364
to 367 of 2007 filed by appellants are dismissed.
13.
Parties are left to bear their own costs.
(MUHAMMAD KHALID MEHMOOD KHAN)
JUDGE
Approved for reporting.
JUDGE
‘Ejaz’
(ABDUS SATTAR ASGHAR)
JUDGE