Pir Auliya Badshah etc Vs Collector Land Acquisition

Judgment Sheet

PESHAWAR HIGH COURT, ABBOTTABAD BENCH

JUDICIAL DEPARTMENT

Regular First Appeal No.124-A/2019 Pir Auliya Badshah etc... (Appellants) versus Collector Land Acquisition etc ... (Respondents) Present: Syed Altaf Hussain Shah, Advocate for appellants.

Mr.Wajahat Hussain Shah, Assistant Advocate General for respondents.

Date of hearing: 20.05.2025.

JUDGMENT

SYED MUDASSER AMEER, J.- This single judgment is directed to decide this and the connected Regular First Appeal (‘RFA’) No.174- A/2019 titled “Govt of KPK v. Peer Olya Badshah etc” as both of them have arisen out of the same judgment of learned Referee Judge with respect to a common Award and common questions of law and facts are involved therein.

2.Precisely, the facts necessary for the disposal of these appeals are that on the request of Sub Divisional Officer C&W Department (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

Abbottabad (respondent No.3 herein), Land Acquisition Collector Abbottabad (respondent No.1 herein), after fulfilling of the codal formalities including issuance of notification under section 4 of The Land Acquisition Act, 1894 (hereinafter is to be referred as Act of 1894) dated 15.09.2010, followed by Corrigendum, acquired a piece of land measuring 19 Kanals – 02 Marlas situated in Moza Sultanpur Tehsil Havelian District Abbottabad through Award No.219 dated 18.10.2011 for construction of playground, which carries the detail of Khasra Number(s) and area.

The market value of the different kinds of the acquired land was fixed as below:

S. No. Kind of Land Rate Per Marla

01.Ghara Abbi Rs.1765/31

02.Ghair Muzrooha Rs.2363/26

The 15% compulsory acquisition charges were also allowed by respondent No.1.

3.Being dissatisfied with the value/ compensation of their acquired land as determined/fixed in the subject Award, the appellants/landowners filed Reference/objection petition under relevant section of the Act of 1894 (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

and the respondents (acquiring department) were summoned. They submitted their written reply to the aforesaid Reference of the landowners contesting the same on various legal and factual grounds and consequently the learned Referee Judge framed issues for the disposal of the Reference and both the parties were asked to produce their respective evidence which they did accordingly. During pendency of case, learned Referee Judge appointed a local commission who after conducting spot inspection submitted its report. Thereafter the learned Referee Judge after hearing arguments from both sides, rejected commission report, partially allowed Reference of the appellants/landowners through the judgment and decree dated 29.03.2019. Feeling aggrieved from the aforesaid judgment and decree, the appellants/landowners as well as the acquiring department have challenged the same before this Court through this and connected RFA.

4.Arguments of learned counsel for the parties heard in considerable detail and the record perused with their able assistance.

(S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

5.Counsel representing the appellants/ landowners contended that the acquired land has much potential value than assessed by the Collector and Referee Judge. He stated that neither the Collector nor the learned Referee Judge has determined and awarded a fair market value of the acquired land. Report of local commissioner was not appreciated properly and Referee Judge erred in law by rejecting the same, he added. He further contended that the while fixing market value of the acquired land, Collector has wrongly considered one-year average pertaining to the year prior to the issuance of award, prepared by the revenue official who was produced by the department, while learned Referee Judge has also not properly regarded and appreciated material brought on record including statement of Patwari Halqa recorded as CW-2. On the other hand, it is the case of respondents/ acquiring department that no basic facilities were available in the surrounding of the acquired land.

That the learned Referee Judge while fixing the market value of the acquired land has not based its decision on valid grounds, however, he could not (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

point out any evidence/material on the basis of which the Collector had correctly fixed the fair market value of the acquired land and rightly so as the whole record/evidence is completely silent about the stance of the acquiring department with respect to a correct and fair market value of the acquired land.

6.Perusal of evidence of parties and material available on the file shows that the Collector has fixed the market value of the acquired land on the basis of Ost-Yaksala ( )اوسط يکسالہof the ibid Mouza for the period from 15.09.2009 to 15.09.2010. Similarly, Referee Judge while enhancing the compensation amount of the acquired land solely relied on one-year average from 01.01.2011 to 21.13.2011 (Ex.PW-1/8). The criterion of Ost-Yaksala (يکسالہ )اوسط for determination of market value of the acquired land, on one hand, is not in accordance with the spirit of section 23 of The Land Acquisition Act, 1894 and on the other, the same has since been disapproved by the Supreme Court of Pakistan as well as by this court as it is settled since long that while determining the market value of the (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

acquired land, Ost-Yaksala may be one of the factors, however, the same could not be an exclusive and authoritative factor for the same.

The aforesaid established legal position could not be controverted by the learned counsel representing the appellants and rightly so as the Supreme Court of Pakistan in case titled “Government of Pakistan through Military Estate Officer, Abbottabad and another vs Ghulam Murtaza and others” reported as 2016 SCMR 1141, has held as under:

“Numerous judgments and dictas given and laid down by this court with binding and laying guiding principles on the subject issue have unfortunately been conveniently ignored by the Collector as he remained stuck to the one year average without taking care of present and future potentiality of the land acquired. It has been repeatedly laid down that being a compulsory acquisition of land for public purposes, the owners of the land are deprived of its utility while at the same time the Collectors Acquisition simply impose their own opinion ordinarily based on one year average which is not a correct approach to the matter, as has been laid down by this court.”

(S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

7.As per pleading of the appellants/ landowners, their evidence as well as commission report (Ex.CW-1/1), the acquired land which is situated adjacent with Patwar Halqa Sultanpur, Cantonment carries more value than assessed either by the Collector or Referee Judge. It was noted by the commission that there are workshops, petrol pumps, CNG stations close to the acquired property which is also surrounded by populated area, Central Ammunition Depot POF, Havelian and all facilities of life like gas, electricity, educational institutions and telephone etc are available as reflected in photographs appended with report (Ex.CW-1/1). He further noted that the acquired land is suitable for residential purposes and while concluding the market value of the acquired land he opined that it value including boundary wall is about Rs.1,000,000/- per Kanal.

Though Referee Judge rejected report of local commissioner (Ex.CW-1/1) by observing that commissioner has admitted in cross-examination that the acquired land is situated on the bank of river and is flooded with water in rainy reason.

Having said that acquiring department has never (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

put any question to the local commissioner that the commission proceedings were carried out either in their absence or that its report is false or baseless.

Similarly, no suggestion whatsoever was put to local commissioner during his cross-examination that no workshops, petrol pumps, CNG stations close to the acquired property which is also surrounded by populated area, Central Ammunition Depot POF, Havelian and all facilities of life like gas, electricity, educational institutions and telephone etc as stated by him in examination-in-chief. Meaning thereby that these ground realities as reflected in the commission report (Ex.CW-1/1) are not denied by the respondents.

8.Albeit respondents/acquiring department have asserted that market value was wrongly enhanced by the Referee Judge but they have not brought on record any cogent evidence to establish that either the acquired land is not situated near the workshops, petrol pumps, CNG stations etc or its market value is less than that which has been (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

assessed by the local commission (CW-1) keeping in view its location and potentiality.

9.It would not be out of place to mention here that collection of evidence through local commissioner is an admissible mode duly recognized by the Code of Civil Procedure and the mode of collection of evidence by a local commissioner has been approved by the Supreme Court of Pakistan in many cases including the case titled “Hassan Nawaz v. Atta Muhammad (Deceased) through his Legal Heirs” reported as 2021 SCMR 857, has held that”

“It is not always necessary that the Court may record evidence itself. For a variety of reasons, it may be recorded through a Commission.

The Court as a principal may exercise powers and delegate authority, under section 75 or Order XXVIII, for personal appearance of a witness in front of the Commission either out of its own accord or on application of either party. However, it does not bar the Court itself of the authority to examine the witness where it is not satisfied.”

Further reliance in this regard is place on the case titled “Malik Tariq Mahmood and others (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

v. Province of Punjab and others” reported as

2023 SCMR 102.

10.It has been the consistent view of Supreme Court of Pakistan as well as of this Court that while determining the market value of the acquired land, not only the existing market value of the acquired land is to be considered but its future potentiality is also to be considered. It has also to be born in mind that it is not a transaction between a willing purchaser and a willing seller rather it is a transaction which has been enforced upon the land owners. It is also to be kept in mind while determining the market value of the acquired land that the land owners are not only to be paid the market value of the acquired land but they are to be compensated in such a manner so that in future they may not feel any depravation for striking a losing bargain and as such by applying the aforesaid yardstick, the Collector as well as Referee Judge both have failed to fix the fair market value of the acquired land.

11.The Supreme Court of Pakistan recently in a case titled “Federal Government of Pakistan Through Ministry of Defence Rawalpindi and (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

Others v. Mst.Zakia Begum and others” reported as PLD 2023 Supreme Court 277, has traced out judicially approved criteria for the determination of the fair market value of the acquired land. Para No.9 of the said judgment being relevant is reproduced below:

“9. This Court, while interpreting Section 23 of the Act has interpreted potential value to mean and include the following factors:

(i)The land has potentiality if it is in close proximity to a residential area, or the municipal limits of a city. Also to be considered is that the acquisition of such land is proof of its potential for development. (Land Acquisition Collector and others v. Abdul Qayyum Malik and others 1980 SCMR 63).

(ii)The land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined, but also by reference to the uses to which it is reasonably capable of being put in the future; and market-value is the potential value of the property at the time of acquisition which would be paid by a willing buyer to a willing seller, when both are actuated by business principles prevalent in the locality at that time. (Fazalur Rahman and others v.

General Manager, S.I.D.B and another PLD 1986 SC 158).

(iii)Revenue record is not conclusive of the value of the land, rather it is the value of the use which the land is capable of and the use of the land in the vicinity. (Sardar Abdur Rauf Khan and others v. The Land Acquisition Collector/ Deputy Commissioner, Abbottabad and

(S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

others 1991 SCMR 2164 and Land Acquisition Collector, G.S.C., N.T.D.C., (WAPDA), Lahore and another v. Mst. Surraya Mehmood Jan 2015 SCMR 28).

(iv)The Court is to take into consideration the potentialities of the land, which may even include the price escalation, (sic) the issuance of notification under section 4(1) of the Act. (Land Acquisition Collector, Abbottabad and others v.

Muhammad Iqbal and others 1992 SCMR 1245) and Sarhad Development Authority, NWFP (now KPK) through COO/CEO (Officio) and others v. Nawab Ali Khan and others 2020 SCMR 265).

(v)For determining the price which a willing purchaser would give to the willing seller relying only on past sales is not enough as the value of the land with all its potentialities may be determined by examining local property dealers or other persons who are likely to know the price that the property can fetch in the open market. Where land is acquired near the Highway, its potentiality and future prospects are to be considered (Maqbool Ahmed Fatehally and others v. The Collector, District Lasbella and others 1992 SCMR

(vi)The possibility of land being used for a different purpose in future and its potential value on account of its situation near the developed area is important. (Province of Punjab through Collector Bahawalpur, District Bahawalpur and others v. Col. Abdul Majeed and others 1997 (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

SCMR 1692).

(vii)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, neighbourhood, potentiality or other benefits. The potential uses to which the land can be put to is relevant. (Murad Khan through his widow and 13 others v. Land Acquisition, Collector, Peshawar and another

1999 SCMR 1647).

(viii)Amenities such as roads, water, gas, electricity are relevant as is availability of schools and colleges in the vicinity of the acquired land. Urbanization of the area shows great potentiality of the area. (Ministry of Defence through Secretary, Government of Pakistan and others v. Syed Wajdi Rizvi 2009 SCMR 105 and WAPDA through S.E. Acquiring Cell CRBC Project WAPDA, D.I. Khan and another v. Syed Ali and others 2010 SCMR 82).”

In another case “Malik Tariq Mehmood and others v. Province of Punjab and others” reported as 2023 SCMR 102, the Supreme Court of Pakistan has enumerated all those factors which are to be considered while fixing the market value of the acquired land. Para No.7 of the said judgment being relevant is reproduced below:

(S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

“Under section 23(1) of the Act, compensation is to be determined on the basis of the market value of the land at the date of publication of the notification under section 4 of the Act. The Court assessing compensation is required to take into consideration not only the present purpose or the present use to which the land is applied but also any other more beneficial purpose to which it might reasonably be put by the owner. Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam [AIR 1939 PC 98]. Indubitably, it is true that regard can be had only to the existing conditions and what is likely to happen in reasonably near future and compensation cannot be fixed on the basis of what might happen in the dim and distant future. Where there is a reasonable possibility of the land being put to a more profitable use within a reasonable period the same cannot be ignored in assessing its value. Bailey v. Isle of Thanet Light Railways Company [(1990) 1 QB 722]. Compensation has always to be determined by reference to the price which a willing vendor may reasonably expect to obtain from a willing purchaser. Fazalur Rehman and others v. General Manager, SIDB and another [PLD 1986 SC 158]. When the land possesses some unusual, special or unique features as to its location or potentialities, due weight must be attached to all these elements. Askari Cement through Chief Executive v. Land Acquisition Collector (Industries) Punjab, etc [2013 SCMR 1644]. After considering all the circumstances, the Court has to arrive at a fair estimate with reference to the surrounding circumstances and evidence in the case and to award a fair compensation on that basis. The Court further ought to be liberal in the sense that it should not be (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

too meticulous or pedantic in dealing with the evidence. It is also true that an entry in the revenue record as to the nature of the land may not be conclusive. If the land acquired is found to be useful both for agricultural or non-agricultural purposes, merely on the ground that it was used as agricultural land by the owner till the time of its acquisition, its potentiality as non-agricultural land cannot be ignored. Sardar Abdur Rauf Khan and others v. The Land Acquisition Collector/Deputy Commissioner, Abbottabad and others [1991 SCMR Recently in two cases i.e. “National Highway Authority v. Rai Ahmad Nawaz Khan and others” (2023 SCMR 700) and “Nawabzada Abdul Qadir Khan and others v. Land Acquisition Collector Mardan and others” (2023 SCMR 950), the Supreme Court of Pakistan has extended the scope of section 23 of the Land Acquisition Act by observing that since a citizen/land owner is subject to eminent domain of the government, therefore, the claims of the land owners are to be considered sympathetically. Para No.8 of the judgment reported as 2023 SCMR 700 being relevant is reproduced below:

“8. It is important to state that the intention of the legislature behind section 23 was that whenever a Court is determining the quantum of compensation (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

to be awarded to those who had been subjected to exercise of the power of eminent domain under the LAA 1894, it needs to be considerate and sympathetic towards the claims made by those whose property was compulsorily taken by the state against their will for a public purpose. Section 23 allows a Court to compensate such landowners for giving up their properties for the greater good, on the doctrine of individual rights must give way to the greater public interest (salus populi suprema lex esto).”

12.In the instant case, there were two independent means on available record for determination of the fair market value of the acquired land in accordance with the principles laid down by the Supreme Court of Pakistan.

Firstly, the commission report, which has assessed the said value at around Rs.1,000,000/- per Kanal.

Secondly, the “Ost Yaksala” (one year average) from 29.01.2011 to 22.12.2011 (Ex.PW-2/1) produced by CW-2 upon Court directions. The said document provides the value of the kind of land acquired as Rs.2,193,574.40 per Kanal. It is to be noted that CW-2 had prepared the said average upon the directions of the Court itself and it had provided a holistic picture of the acquired land which was closer to the reality and the actual (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

prevailing market value of similar kind of land in the vicinity between willing buyers and willing sellers. However, the learned Referee Judge failed to consider these crucial pieces of evidence and record.

13.In view the above discussion and verdicts of superior courts on the subject as well as the commission report and the judicial consensus developed so far with respect to the matters to be considered for determination of the market value of the acquired land, the appellants/landowners are entitled to enhancement in compensation amount, particularly when in para No.15 of his judgment, Referee Judge has held that the acquired land is residential as well as commercial in its nature and all facilities in shape of telephone, electricity, gas, healthcare and road are available nearby and resultantly the report (Ex.CW-1/1) is accepted partially.

14.Accordingly, on partial acceptance of this appeal, findings of the learned Referee Judge recorded through the impugned judgment and decree dated 29.03.2019 to the extent of market value of the acquired land are modified and just (S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer

and proper market value of the acquired land is fixed as one million rupees (Rs.1,000,000/-) per Kanal. Rest of the findings of learned Referee Judge rendered through impugned judgment and decree are upheld and maintained. While aforesaid connected RFA No.174-A/2019 filed by acquiring department being meritless is dismissed.

ANNOUNCED.

(Jamil)

JUDGE

(S.B.) Hon’ble Mr.Justice Syed Mudasser Ameer