National Highway Authority through its General Manager (Construciton) Khyber Pakhtunkhwa National Highway Authority, Peshawar Vs Land Acquisition Collector (Peshawar Northern Bypass Project) NHA Peshawar and others

IN THE PESHAWAR HIGH COURT, PESHAWAR

[JUDICIAL DEPARTMENT]

RFA No. 152-P/2024

National Highway Authority through its General Manager (Construction) Khyber Pakhtunkhwa National Highway Authority, Peshawar ...............Appellant

Vs Land Acquisition Collector (Peshawar Northern Bypass Project) NHA Peshawar and others..........................................Respondents Present: M/S Inayatullah Khan and Osama Shahid Khawaja, Advocates, for the appellant.

Muhammad Amin, Advocate, for the respondents.

Date of hearing: 07.09.2026

JU D G M EN T

MUHAMMAD IJAZ KHAN, J.- Through this single judgment, this court intends to decide the instant as well as the connected R.F.A No. 155-P/2024 titled “National Highway Authority through its General Manager (PNBP) Peshawar vs. Mamoon-ur- Rasheed and others” and R.F.A No. 168-P/2024 titled “Ihsan Ullah and another vs. Land Acquisition Collector, National Highways Authority, Peshawar and others” as all these appeals have arisen out from the same consolidated

judgment and decree of the learned Additional District Judge/Referee Court, Peshawar dated 20.01.2024, whereby the reference petitions of respondents/land owners have partially been allowed and thereby has enhanced the market

value/compensation of the acquired land from Rs.

25,604/- per Marla to Rs. 10,00,000/- per Marla along with 15% Compulsory Acquisition Charges, whereas 6% interest has been denied to them.

2.Precisely, the facts necessary for the disposal of the aforesaid appeals are that the Land Acquisition Collector (PNBP) NHA, Peshawar (respondent No.1 herein), after fulfilling of all the codal formalities including issuance of notification under section 4 of The Land Acquisition Act, 1894 (hereinafter is to be referred as “The Act of 1894”), has acquired landed property through Award No. 24/LAC/PNBP/NHA/21 dated 06.10.2021 for the construction of “Peshawar Northern Bypass Project (Package-II)” situated at Mauza Patwar Payan, Tehsil Mathra, District Peshawar. Initially, notification under Section 4 of The Act of 1894 was issued on 12.11.2011, but neither any further proceedings were conducted nor any award was announced, compelling the affected

landowners, to approach to this Court by filing W.P.

No. 3970-P/2017, W.P. No. 5825-P/2019, and COC No. 431-P/2021 and ultimately a corrigendum notification under Section 4 was issued on 22.01.2019 followed by an Award No.

24/LAC/PNBP/NHA/21 dated 06.10.2021, which carries the detail of Khasra Numbers of the acquired land, whereby market value of the acquired land was determined as Rs. 25,604/- per marla.

3.Being dissatisfied from the market value/ compensation of their acquired land as determined/fixed in the said Award, the respondents- landowners filed two Reference / Objection petitions respectively bearing No. 03/LA of 2021 titled “Mamoon-ur-Rasheed and others .vs. Collector LAC (NHA), Peshawar and others” and No. 07/LA of 2022 titled “Muhammad Arsala Khan .vs. Collector LAC (NHA), Peshawar and others” under Section 18 of The Act of 1894 and in which the present appellants (acquiring departments) were summoned and 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 the parties were required to produce their respective evidence which they led accordingly. Thereafter, the learned Referee Judge after hearing arguments, partially allowed those References, vide its consolidated judgment and decree dated 20.01.2024 in the following terms:-

“As a sequel to my finding on foregoing issues, the petitioners for the purpose of enhancement of compensation have succeeded to prove their case, hence on acceptance of both Reference Petitions in hand, the per marla market value of the land of the petitioners as reflected acquired from their possession and authorization in the acquittance roll as per their respective share is fixed @ Rs.10,00,000/-(ten lac) Per Marla with 15% compulsory acquisition charges while so far as 6% interest is concerned, the said provision of section 28 of Land Acquisition Act 1894 is amended through KP ordinance No.XVII of 2001 vide which interest of 6% has been deleted from Act ibid so relief to said extend is declined. There is no order as to costs”.

Being aggrieved of the same, the appellants- acquiring department have now approached to this Court by filing the instant as well as connected RFA No. 155-P/2024, whereas the respondents-land owners have also filed the RFA No. 168-P/2024 for further enhancement of the compensation amount as

well as for the grant of 6% interest upon the said compensation amount.

4.Arguments heard and record perused.

5.The record would show that it is the case of respondents-land owners that due to the locale of the property and future potentiality of the acquired land neither the Collector in the impugned Award nor the Referee Judge in the impugned judgment and decree has fixed a fair compensation amount of their acquired land as the respondents-land owners have brought on record an overwhelming and substantial evidence to prove that they are entitled for the compensation of their acquired land @ Rs.

20,00,000/- per marla for commercial kind of land and Rs. 12,00,000/- per marla for residential kind of land, whereas the stance of the acquiring department is/was that since the acquired property can only be used for agriculture purposes, therefore, the learned Referee Judge has wrongly enhanced the compensation amount which was correctly determined and fixed by the worthy Collector concerned.

6.In view of the above divergent pleas of both the contesting parties, now this Court will proceed to answer the following questions:-

1)Whether the market value of the acquired land as fixed by the Collector in the award dated 06.10.2021 is fair?

2)Whether the market value of the acquired land as fixed by the learned Referee Judge vide impugned judgment/ decree dated 20.01.2024 is correct and fair?

3)What should be a fair and correct market value of the acquired land?

7.As far as question No.1 is concerned, it is part of the record and as spelling out from the contents of the award as well that the subject land was acquired by the appellants/acquiring department through Award No. 24/LAC/PNBP/NHA/21 dated

06.10.2021, whereby the Collector has fixed the compensation amount as Rs. 25,604/- per marla on the basis of Ost-Yaksala ( )اوسط يکسالہwhich criterion is, on one hand, not in accordance with the spirit of section 23 of The Act of 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 acquired land, Ost-Yaksala may be one of the factor, 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 as well and rightly so as the Supreme Court of Pakistan in a case1 has since been held that numerous judgments and dicta given and laid down by this court with binding and laying guiding principles on the subject issue have unfortunately and conveniently been 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. Since in this case too, the Collector has fixed the compensation amount on the basis of Ost- Yaksala ( )اوسط يکسالہwhich is against the various judgments of the Apex Court, therefore, question No.1 is answered in negative.

Government of Pakistan through Military Estate Officer, Abbottabad and another vs Ghulam Murtaza and others (2016 SCMR 1141)

8.As far as questions No.2 & 3 are concerned, it would be relevant to mention here that it was the case of respondents/land owners that the market value of acquired land is not less than Rs.10,00,000/- to Rs.15,00,000/- per marla, whereas the stance of appellants/acquiring department is that though the market value fixed in the impugned award has not been properly fixed being on the basis of Ost- Yaksala, however, the learned Referee Judge too has not fixed the market value of the acquired land in accordance with the evidence and material brought on record by the respondents/land owners.

9.In order to ascertain that as to whether the learned Referee Judge has properly enhanced the market value of the acquired land, it would be relevant to mention here that when notices were issued to the respondents / land owners under Section 9 and 10 of The Act of 1894 by the Collector then they accordingly appeared and claimed that the market value of the acquired land is ranging from Rs.10,00,000/- to Rs.15,00,000/-. The factum of the aforesaid claim by the respondents/land owners does reflects from the contents of the impugned award dated 06.10.2021. Similarly, when aforesaid

objection / claim of the land owners was not appreciated by the worthy Collector then they thereafter filed the subject References (two in numbers), whereby in one Reference petition, respondents / land owners have claimed the amount of Rupees Two million (Rs.20,00,000/-) per marla for commercial property, and Rs. 1.2 million (Rs.12,00,000/-) per marla for residential land and while highlighting the locale of the acquired land and its future potentiality, it has been pleaded in para-4 of the Reference Petition that:-

اعلی درجے ٰ اراضی زير بحث کے پاس کے پرائيويٹ سکولز اور کالجز اور ماربل فيکٹرياں مختلف قسم کی ہاؤسنگ جس ميں ايوارڈ مذکوره بالا،سوسائٹيز مرلہ26 عذر دار کی اراضی/ ميں سائل الماسہ ماڈل ٹاؤن اور پروفيسر ماڈل ٹاؤن کے درميان ميں واقع ہونے کی وجہ سے نہايت ہی قيمتی اراضی ہے۔اور يہ کہ اراضی زير بحث ورسک روڈ کيساته واقع ہے۔

10.In order to further substantiate their aforesaid plea qua the desired market value of the acquired land, respondents / land owners have produced Patwari Halqa namely, Sadaqat Khan as PW-1, Abid Khan, Qanungo as PW-2 and in one case the objector namely, Mamoon Rashid has appeared as PW-3, wherein, in the connected Reference petition, Noor

Ullah Jan, the attorney of respondents/land owners has also appeared as PW-3. The respondents / land owners have also produced two property dealers namely, Iftikhar Mehmood as PW-4 and Imran Hussain as PW-5. It is quite interesting to note that in the examination-in-chief of PW-3 namely, Mamoon Rashid, he has claimed the compensation amount @ Rs.15,00,000/- for commercial kind of land and Rs.12,00,000/- for residential kind of land, however, in the cross examination, the said claim has not been challenged or controverted rather the same has affirmed by the appellant’s counsel as it has been brought in the cross examination that:- بيس لاکه روپے فی مرلہ کمرشل کی تا12 اور رہائشی فی مرلہ، قيمت ہے -ميں قيمت تهی2019 لاکه روپے15

Similarly, from PW-4 namely, Iftikhar Mehmood (Property Dealer) who has stated in the examination- in-chief that the value for the residential plot in the acquired property had been sold in those days @ Rs.

10,00,000/- per marla and in this regard he has also exhibited various transactions executed through his good office as Ex.PW 4/1 to Ex.PW 4/3 and then in the cross examination, the aforesaid fact has also been confirmed from him as under:-

پٹوار پايان ميں رہائشی اراضی فی لاکه روپے12 سے10 مرلہ کی قيمت تا19 ہے۔ اور کمرشل اراضی فی مرلہ کا2019 لاکه روپے ہے۔ يہ ريٹ20 ريٹ ہے

Similarly, from PW-5 namely, Imran Hussain, Property Dealer, the following fact qua the market value of the acquired land has also been confirmed in his cross examination which reads as under:- پٹوار پايان ميں رہائشی علاقہ کی قيمت لاکه روپے ہے۔ يہ جو ميں12 ً تقريبا کا ريٹ ہے2019 ريٹ بتا رہا ہوں وه ميں2019 اور کمرشل اراضی کی قيمت . لاکه روپے تهی22 تا20

In view of the above assertion by the witnesses of the respondents / land owners and then their confirmation/affirmation in the cross examination with the blessing of the learned counsel representing the acquiring department, which would manifestly show that the market value of the acquired land was ranging from Rs. 10,00,000/- to Rs. 20,00,000/- per marla depending upon its nature being commercial or residential as the case may be.

11.It would also be relevant to mention here that during the course of trial, the learned Referee Judge has also sent a commission namely, A.Hashim Khan, Advocate to the spot with different TORs as reflects from the order sheet of the learned Referee Judge

dated 23.08.2023 and accordingly the said commissioner had visited the spot in presence of both the contesting parties and who has also recorded the statements of various persons including property dealers of the area and who, in his commission report, has opined that:-

جائيداد متدعويہ روڈ بر لب ہے اور ،کمرشل روڈ کے دونوں جانب دکانات ماربل، پٹرول پمپس، سکول،ہسپتال گورنمنٹ، موٹر بارگين،فيکٹرياں ، برائے خواتين،ڈگری کالج برائے مرد کالونياں واقع ہيں جو کہ،گيس پلانٹس جائيداد متدعويہ سے پيوستہ کچه فاصلے در فاصلہ پر واقع ہيں۔ جس سے جائيداد متدعويہ بر لب سڑک و پيوستہ کمرشل ہو چکا ہے اور وه اپنی زرعی حيثيت کافی حد تک کهو چکی ہے

And when the aforesaid report was submitted by the local commissioner, the appellants / acquiring department filed an objection petition, therefore, the worthy commissioner was summoned in the court and was examined as CW, however, during the course of his cross examination too, nothing material could be brought or extracted from him in favour of the appellant, who in his report too, has opined that the market value of the acquired land for the residential purpose is Rs. 8,00,000/- to Rs. 10,00,000/-, whereas for the commercial it is Rs. 23,00,000/-, per marla.

12.In view of the aforesaid overwhelming evidence, the respondents / land owners have substantially established on record that the property acquired by the appellants is a commercial property as the same is situated at the brink of Warsak Road which is the hub of educational and commercial activities due to the location of various schools, marble factories, petrol pumps, hospitals etc. and as such the learned Referee Judge has rightly concluded that the acquired property is commercial in nature and as such has rightly fixed the compensation amount of the acquired land.

13.As against this, it is quite surprising and astonishing to note that on one hand, the Collector in the impugned award has fixed, the market value of the acquired land @ Rs. 25,604/- per marla on the basis one year average which yardstick has since been disapproved by the apex court being not in line with the mandate of Section 23 of The Act of 1894 as highlighted hereinabove and on the other, the appellants / acquiring department have not brought on record that which would be the appropriate market value of the acquired land as they have not produced even a single witness to establish the same

in support of their contention rather they have relied on the statement of PW-1 namely, Sadaqat who is a Patwari and PW-2 namely, Abid Khan who is a Qanungo (who were produced by the respondents / land owners) and who in their statement have merely produced the official record and certain mutations pertaining to another Mouza which evidence is not sufficient to discard the aforesaid overwhelming- cum-confirmatory evidence brought by the respondents / land owners. It would also be relevant to mention here that when once the respondents / land owners discharged their burden by producing the aforesaid cogent and convincing evidence qua a fair market value of the acquired land as was required from them as per mandate of Article 117 of The Qanun-e-Shahadat Order, 1984 then under Article 118 read with Article 119 of The Qanun-e- Shahadat Order, 1984, the burden shift to the appellants / acquiring department to have established that what would be the proper market value of the acquired land and as such they have to establish their case on its own evidence and legally they would not be allowed to take benefit of the weaknesses of respondents / land owners as was pressed hard by

both the learned counsels representing the appellants, therefore, the stance of the appellants / acquiring department have rightly been discarded by the learned trial court.

14.It has been the consistent view of the Honourable Supreme Court of Pakistan as well as of this court that while determining the market value of the acquired land, not only the existing potentiality and market value of the acquired land is to be considered but its future potentiality is also to be taken into consideration. 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 that while determining the market value of the acquired land 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 of a losing transaction and as such by applying the aforesaid yardstick, the learned Referee Judge has rightly fixed the market value of the acquired land.

15.The Supreme Court of Pakistan recently in a case2 has traced out the 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 Federal Government of Pakistan Through Ministry of Defence Rawalpindi And Others vs Mst.Zakia Begum and others (PLD 2023 Supreme Court

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 2342).

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 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 case3, the Supreme Court of Pakistan has traced out 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:

“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 Malik Tariq Mehmood and others vs Province of Punjab and others (2023

SCMR 102)

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 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 2164].”

Recently in two other cases4 as well, 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 National Highway Authority vs Rai Ahmad Nawaz Khan and others (2023

SCMR 700)

Nawabzada Abdul Qadir Khan and others vs Land Acquisition Collector Mardan and others (2023 SCMR 950)

to eminent domain of the government, therefore, the claims of the land owners is 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 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).”

In the same way, in another case5 the Apex Court has held that yet, the sole reliance of the Collector on a one-year average price to determine the amount of compensation overlooks the distinctive attributes and future potential of the acquired property. While the one-year average price may be a factor in determining the market value of the land, it cannot be the sole determinant. In assessing compensation, the Collector must consider not only the current market value of the land but also its potential value. The market value is to be taken up as one existing on the date of taking possession of Government of Pakistan through Secretary, Ministry of Defence, Rawalpndi Military Estates Officer, Hazara Circile, Abbottabad and another .vs. Mst. Ayesha Bibi (Widow) and others (2024 SCMR 1323)

the land2, while the potential value is the value to which similar lands could be put to any use in future.

Thus, in determining the quantum of compensation, the exercise may not be restricted to the time of taking possession of the land, but its future value shall also be taken into account. And this crucial aspect was strikingly lacking in the award determined by the Collector, so vehemently relied on by the learned Additional Attorney General.

Likewise, in a case6 the Apex Court has held that it is by now settled that the most important aspect qua the lands compulsorily acquired is that the mandatory returns proposed to be given to the land owner is the 'compensation' and not merely the market value of such land. In this regard, it is noteworthy, as held by this Court in "Land Acquisition Collector and others v. Mst Iqbal Begum and others" (PLD 2010 SC 719) that compensation should be 'gold for gold' and not 'copper for gold'. A perusal of Section 23 of the Act reflects that various factors are to be taken under consideration while determining compensation, with market value being just one such factor as reiterated in "The Province of Sindh v. Ramzan and others" (PLD 2004 SC 512).

Province of Punjab through District Collector / District Officer (Rev), Lahore and others .vs. Malik Abdul Latif Amar (2025 SCMR 830)

Furthermore, it is pertinent to note that compensation is a very wide term, indicating that the land owners, for various reasons, are to be compensated and not merely paid the price of the land which is just an interaction of supply and demand fixed between a willing buyer and a willing seller. Additionally, although, mere classification or nature of land, can be taken as a relevant consideration for the purposes of determining compensation, it is not an absolute one. Factors such as location, neighbourhood, potentiality or other benefits could not be disregarded either. Indeed, the place and situation of the acquired land are paramount considerations that must be accorded due and thoughtful attention in the fair assessment of compensation.

So keeping in view the above string of authorities and the evidence brought by the parties as well as the commission report and the judicial consensus developed so far qua the matters which are to be considered for determination of the market value of the acquired land, the learned Referee Judge has rightly considered the material brought by the parties in their evidence and as such it has rightly

corrected the award and thus its judgment and decree needs no interference by this Court.

16.As far as RFA No. 168-P/2024 is concerned, whereby the respondents / land owners being appellants have prayed for further enhancement of compensation amount of the acquired land to Rs.

20,00,000/- per marla as well as for the grant of 6% interest as was neither granted by the Collector in the subject award nor by the learned Referee Judge in its impugned judgment on the ground that since the provision of Section 28 of The Act of 1894 has amended through Khyber Pakhtunkhwa Ordinance No. XVII of 2001 vide which 6% interest has been deleted. As far as the first prayer of the respondents / land owners is concerned, as discussed hereinabove that the evidence so brought by the respondents / land owners does speak that the market value of the acquired land is ranging from Rs. 10,00,000/- to Rs.

20,00,000/- depending upon its nature being commercial or residential and as such to this extent, their prayer could not be acceded to, however, as far as their prayer for the grant of 6% interest is concerned, the same bears legal weightage. It would be appropriate to mention here that in the instant

case, notification under Section 4 of The Act of 1894 was issued on 12.11.2011, however, thereafter, no further proceedings were carried out, therefore, the land owners approached to this Court by challenging the said notification and it was thereafter on 22.01.2019 when a corrigendum notification under Section 4 of The Act of 1894 was issued. It is also part of the record and as admitted by the learned counsel representing the appellants at the bar as well that the acquiring department has not deposited the amount so fixed in the award to the collector and as such the compensation amount as was fixed in the impugned award dated 06.10.2021 and then the enhanced amount as fixed by the Referee Judge has not been paid till date to the land owners. It would be relevant to mention here that initially the grant of 6% interest for the enhanced compensation amount was to be regulated by Section 28 of The Act of 1894. The said Section being relevant is also reproduced below:-

28.Collector may be directed to pay interest on excess compensation. 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.

however, recently the Provincial Government of Khyber Pakhtunkhwa has made an amendment in Section 28 of The Act of 1894 through The Khyber Pakhtunkhwa Land Acquisition (Amendment) Ordinance XVII of 2001. The amendment so brought in Section 28 of The Act of 1894 reads as under:- "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 deposit with the Court such amount as determined by it."

The comparative perusal of the original Section 28 of The Act of 1894 and that of amended one would show that the words "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" have been replaced with the words "deposit with the Court such amount as determined by it." A further comparative perusal of said unamended and amended Section 28 of The Act of 1894 for the Province of Khyber Pakhtunkhwa would show that earlier there was a ceiling of 6% per annum which a court could grant, however, after the recent amendment, the said ceiling of 6% has been deleted and now it is for the court to determine and grant any appropriate interest

for the enhanced compensation amount. In a case7 the Apex Court has interpreted the aforesaid legal position where it has been held that:- "Reading of the above provisions shows that interest is to be paid for the period from the date of the taking over of the possession of the land till the date of the payment of the enhanced compensation and this is the position prevalent all over Pakistan. In this background, we examine the amended section 28 which reads that once the 'sum' of compensation granted by the collector is enhanced by the court, the court shall direct the Collector to deposit such 'amount' (as opposed to the enhanced 'sum') as determined by it. The amendment has retained the power of the Referee Court to determine the 'amount' payable by the Collector to the landowner over and above the enhanced sum of compensation after considering the factum of possession and the date of actual payment. If it were just the enhanced sum of the award which had to be paid to the landowner, the phrase 'amount as determined by it' would have no significance."

The Apex Court has further held that:

"Our reading of the amended section 28 in KPK shows that the court is now free to award any rate of interest on the enhanced sum of compensation and is not bound by the limit of 6%. It does not mean that the court is not to grant any interest on the sum enhanced. The argument... that the enhanced sum of compensation by the court, even though paid to the landlord several years after taking over of the possession of the land, will still be the same sum and will carry no interest because the amendment takes away the term 6% interest, appears to us to be not only fanciful but also hopelessly misconceived."

Government of Khyber Pakhtunkhwa v. Misal Khan (2022 SCMR 277)

Subsequently, in another case8 the Apex Court made another interpretation to the effect that at the time of hearing of the ibid Misal Khan’s case, the judgment as delivered in Aslam Khaki’s case (PLD 2000 SC 225) was not brought into the notice of the Apex Court as the aforesaid amendment in Section 28 of The Act of 1894 was made by the Provincial Government of Khyber Pakhtunkhwa in compliance with the direction of the Apex Court rendered in Aslam Khaki’s case, whereby the Apex Court observed that instead of “interest” the word “rent” should be used by observing as under:-

"The preamble to the amending Ordinance 2001 which refers to the judgment of this Court delivered in the Aslam Khaki case and the above quoted observations made in that case were not brought to the notice of this Court at the hearing of the Misal Khan case, and thus the Court decided that under the amended section 28, a Referee Court is no more bound by any fixed rate of interest and can grant interest at any reasonable rate. It should have been 'rent' instead of 'interest.'"

The Apex Court further clarified that the enhanced sum of compensation plus the rent are to be taken as the 'amount' determined under section 28 of The Act of 1894. Recently, in an unreported case Government of Khyber Pakhtunkhwa v. Yousaf Khan (2022 SCMR 1836)

having a title of the Land Acquisition Collector .vs.

Ali Akbar’s case (civil Appeals No. 8-P, 9-P, 272 and 293 of 2017), decided on 21.05.2026 the Apex Court has reaffirmed the principles as laid down in Misal Khan and Yousaf Khan’s case. The Court has observed as under:-

"A comparative reading of the above provisions shows that the legislature consciously omitted the expression 'simple interest' as well as the fixed rate of 6% per annum, and substituted the same with the expression 'such amount as determined by it'. The legislative intent, therefore, was not to abolish compensatory relief altogether but, in the backdrop of Aslam Khaki v. Muhammad Hashim (PLD 2000 SC 225), to dispense with the concept of statutory 'interest' and the rigidity of a fixed rate, and to confer discretion upon the Court to determine a just and reasonable compensatory amount."

and thus the conclusion as could be drawn from the aforesaid recent jurisprudence is that though the land owners could not claim interest being against the dicta as laid down in Aslam Khaki’s case, however, they could legally and validly claim such amount as may be determined by the Court in terms of rent, instead of terming it as interest.

17.It would also be relevant to mention here and as stated hereinabove that neither the acquiring department has deposited the amount so fixed in the award before the Collector nor the land owners have

received the same, therefore, whether they would be entitled for the amount of rent / interest from the date of taking possession or not, for which Section 34 of The Act of 1894 being relevant is reproduced below:-

34.Payment of interest. 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.

The plain reading of the aforesaid section of law would show that where the amount of compensation has not been paid or deposited on or before taking the possession of the acquired land, the Collector shall pay the said amount with an interest @ 6% per annum for the date of taking possession till the payment of final amount. It merits to mention here and as reproduced above that though through Ordinance XVII of 2001, an amendment was brought in Section 28 The Act of 1894 by the Provincial Government of Khyber Pakhtunkhwa, however, no amendment has been made in Section 34 of The Act of 1894 which speaks that 6% per annum interest has to be given by the Collector for the period from

taking possession till the date of payment of amount to the land owners, and thus when interest is to be paid by the Collector on the amount as fixed in the award for the period from taking possession till the actual payment to the land owners then such interest shall also be paid on the enhanced amount as determined by the Referee Court as it is settled that where the Referee Judge enhanced the amount as was fixed in the award then it amounts to correction of Award and as such thereafter the award so passed by the Collector merged into the judgment of Referee Judge. It may be added for further clarification that under the existing regime of administration of Justice in Khyber Pakhtunkhwa (as is in field after the amendment in Section 28 of The Act of 1894), both sections 28 & 34 of The Act of 1894 complement each other and thus Section 28 of The Act of 1894 also provides for grant of interest but unlike others provinces, The Khyber Pakhtunkhwa has no statutory limit on the interest to be granted by the court and thus it follows that while the fixed rate under Section 28 of The Act of 1894 has been deleted, but the court still retains the discretion to award a compensatory amount and the mandatory 6% interest under Section

34 of The Act of 1894 continues to apply where the delay in payment of compensation is delayed. In view of the above discussion and mandate of law, the learned Referee Judge has wrongly and illegally refused the grant of 6% interest-cum-rental value to the respondents/land owners on the ground of deletion of 6% from Section 28 of The Act of 1894 and thus to this extent its judgment and decree is modified and as a result thereof, the respondents-land owners are held as entitled for the same. In Misal Khan’s case (2022 SCMR 277), The Apex Court observed that Section 34, which remains unamended, reinforces the concept of interest:- "Another dimension of the case which reinforces the concept of interest is under section 34 of the Act (which was not amended by the 2001 Ordinance in KPK), which deals with the payment of interest on the sum of compensation awarded by the Collector... Under the said provision, the Collector is to pay simple interest at the rate of 6% on the amount of the compensation for the delay in the payment of compensation from the date of taking over of the possession of the land till the date of payment. This provision is still intact in KPK. So, while interest is provided for on the compensation awarded by the Collector, the same cannot be denied when the compensation is enhanced by the court. Sections 28 and 34 have to complement each other and, therefore, section 28 also provides for interest but unlike other provinces, KPK has no statutory limit on the interest to be granted by court."

The Apex Court concluded that:-

"Under the amended section 28, the court is no more bound by any fixed rate of interest and can grant interest at any just, proper and reasonable rate as it determines... Therefore, the award of 6% interest is well within the scope of the powers of the Referee Court under section 28 of the Act (as amended) and is in line with the interest to be granted under section 34 of the Act."

In the ibid case9, the Supreme Court of Pakistan has held that once the "sum" of compensation granted by the collector is enhanced by the court, the court shall direct the Collector to deposit such "amount" (as opposed to the enhanced "sum") as determined by it.

The amendment has retained the power of the Referee Court to determine the "amount" payable by the Collector to the landowner over and above the enhanced sum of compensation after considering the factum of possession and the date of actual payment.

If it were just the enhanced sum of the award which had to be paid to the landowner, the phrase "amount as determined by it" would have no significance.

Section 28 envisages that after the enhanced sum of the award has been worked out, the Court then Government of Khyber Pakhtunkhwa through District Collector/ District Officer (R&E) (Now) Deputy Commissioner Mardan and others vs. Misal Khan and others (2022 SCMR 277)

embarks upon determining the "amount" to be paid to the landowner after considering the sum and the delay in payment...... In another case10, the Supreme Court of Pakistan while modifying interpretation put to the amended section 28 of the Act in the ibid “Misal Khan”, has observed that it should have been "rent" instead of "interest". Under section 28 of the Act, a Referee Court can, and should, add the sum of “actual fair market rental value” of the land found acquired unpaid (or deficiently paid) if it is proved by evidence on record or, in absence of such evidence, a sum equal to 6% per annum of the enhanced sum of compensation as the minimum rental value of that land, from the date of taking possession of the acquired land to the date of actual payment of the enhanced price/ compensation to the landowner.

18.In view of the above discussion and expositions of law on the subject, the instant RFA No. 152-P/2024 titled “National Highway Authority through its General Manager (construction) Khyber Pakhtunkhwa, Peshawar .vs. Land Acquisition Government of Khyber Pakhtunkhwa through Chief Secretary, Peshawar and others vs. Yousaf Khan and others (2022 SCMR 1836)

Collector, NHA, Peshawar and others” and RFA No. 155-P/2024 titled “National Highway Authority through its General Manager (PNBP) Peshawar vs.

Mamoon-ur-Rasheed and others” are dismissed being meritless, whereas connected RFA No. 168- P/2024 titled “Ihsan Ullah and another vs. Land Acquisition Collector, National Highways Authority, Peshawar and others” is partially allowed in terms that their prayer for further enhancement of the market value of their acquired land is dismissed and the market value/sum/amount as determined by the learned Referee Judge alongwith 15% compulsory acquisition charges vide impugned judgment and decree dated 20.01.2024 is maintained, however, appellants/land owners therein are also held as entitled for the grant of rental value @ 6% on the payable amount/sum from the date of taking possession till the actual payment of compensation amount to them.

Announced 07.09.2026 Sd/-

JUDGE

(S.B) Hon’ble Mr. Justice Muhammad Ijaz Khan Noor Shah