Peshawar High Court

Kifyat Ullah Khan and others Vs Chairman NHA and others

Outcome The landowners’ appeals were partially allowed, the Referee Court’s judgment was modified, and the NHA’s appeals were dismissed.

Case
RFA No. 13-B of 2019
Type
Civil
Length
22 pages

Summary

AI-generated · quotes checked against the text

This appeal concerned compensation for land acquired for the Peshawar-D.I. Khan Road Project (N-55). The High Court held that the acquired land had commercial and residential potential and enhanced compensation to Rs. 6,00,000 per kanal, with 15% compulsory acquisition charges and 6% simple interest on the excess amount; the NHA’s appeals were dismissed.

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Written by AI from the judgment's text and may miss nuance. Rely on the full judgment below and the court's official copy. Court's own note: Regular First Appeal Held: Land Acquisition Act, 1894---Sections 23, 28, 34, 53 and 54---Code of Civil Procedure, 1908--- Section 107---Acquisition of land for public purpose---Determination of compensation---Market value--- Commercial and residential potential of acquired land---Enhancement of compensation beyond amount claimed in reference application---Interest on enhanced compensation---Compulsory acquisition charges--- Land measuring 808 Kanal and 09 Marla acquired for extension of Peshawar-D.I.Khan Road Project (N-55)---Collector assessed compensation at different rates for commercial, Barani/Rod Kohi and uncultivable barren land---Referee Court enhanced compensation to rates ranging from Rs.90,000/- to Rs.1,70,000/- per Kanal but declined 6% interest on enhanced amount---Landowners challenged the quantum of compensation, while National Highway Authority challenged the enhancement---Held, compensation under Section 23 of the Land Acquisition Act, 1894 is to be determined with reference to the market value of the acquired land and its existing as well as reasonably foreseeable potential use---Acquired land situated in close proximity to Bannu-D.I.Khan Road, houses, shops and a petrol agency, and its potential for commercial and residential use could not be ignored---Referee Court erred in relying predominantly upon the Local Commission’s report while overlooking the surrounding circumstances and future potential of the acquired land---Referee Court and appellate Court may award compensation beyond the amount claimed in the reference application where the evidence justifies such enhancement under Section 23 of the Act---Compensation accordingly enhanced to Rs.6,00,000/- per Kanal along with 15% compulsory acquisition charges---Section 34 of the Act continues to mandate 6% simple interest where compensation is not paid or deposited on or before taking possession, and such interest is compensatory in nature---Acquiring authority liable to pay 6% simple interest on the amount of compensation determined in excess of the amount already deposited in the Referee Court---Appeals filed by landowners partially allowed and impugned judgment and decree modified accordingly---The appeals filed by NHA dismissed.

Full judgment

Official copy

t^

JUDGMENT SHEET

IN THE PESIIAWAR HIGH COURT,

BANNU BENCH

(Judicial Department)

RFA No.13-B/2019

Kifayat Ullah Khan and others

VeFsus

Chairman N.H.A and others

JUDGMENT

Date of hearing: 23.06.2025.

For appellants: Mr. Ashiq Hussain, Advocate.

For respondents: Muhammad Ibrahim Khan, Advocate.

a Through this

consolidated judgment, I propose to decide the following fourteen (14) interconnected Regular First Appeals namely:

1.R.F.A. No. l3-B of 2019 (Kifayatullah Khan & others -V- Chairman N.H.A & others) instituted on 22.08.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated 18.07 .2019.

2.R.F.A. No. 16-B of 2019 (Mohib Ullah Khan & others -V- Chairman N.H.A & others) instituted on 13.09.2019, against the judgment and decree of Additional District Judge-IliReferee Judge, Lakki Marwat dated 18.07 .2019.

3.R.F.A. No. l7-B of 2019 (Qutab Din & others -V- Chairman N.H.A & others) instituted on 13.09.2019, against the judgment and decree of Additional District

A

Judge-Il/Referee Judge, Lakki Marwat dated

4.R.F.A. No. 2l-B of 2019 (Haji Muhammad Yousaf Khan (deceased) through Mst. Bibi Hajra & others -V- N.H.A & others) instituted on 14.10.2019, against the judgment and decree of Additional District Judge- IllReferee Judge, Lakki Marwat dated 18.07.2019.

5.R.F.A. No. 22-B of 2019 (Mst. Bibi Sehra & others - V- Chairman N.H.A &, others) instituted on 19.09.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated 18.07 .2019.

6.R.F.A. No. 24-B of 2019 (Mk Zali Khan & others -V- Chairman N.H.A & others) instituted on 04.11.2019, 4 against the judgment and decree of Additionat District Judge-Il/Referee Judge, Lakki Marwat dated 7 . R.F.A. No. 26-8 of 2019 (Chairman N.H.A & others - V- Qutab Din & others) instituted on 04.1L.2019, against the judgment and decree of Additional Disfrict JudgeJl/Referee Judge, Lakki Marwat dated

8.R.F.A. No. 27-B of 2019 (Chairman N.H.A & others - V- Mst. Bibi Sehra & others) instituted on 04.11.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated

9.R.F.A. No. 28-B of 2019 (Chairman N.H.A & others - V- Khan Zad & others) instituted on 04.11.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated

I

A

10.R.F.A. No. 29-B of 201'9 (Chairman N.H.A & others - V- Mir ZaliY.han & others) instituted on 04.11.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated 11.R.F.A. No. 30-B of 2019 (Chairman N.H.A & others - V- Haji Gul Zaman & another) instituted on 04.11.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated I 8.07.20 19.

12.R.F.A. No. 31-B of 2019 (Chairman N.H.A & others - V- Haji Muhammad Yousaf & others) instituted on 04.11.2019, against the judgment and decree of o Additional District Judge-Il/Referee Judge, Lakki Marwat dated 18.07 .2019.

13.R.F.A. No. 32-B of 2019 (Chairman N.H.A & others - V- Kifayatullah & others) instituted on 04.11,.2019, against the judgment and decree of Additional Disfrict Judge-Il/Referee Judge, Lakki Marwat dated t8.07.2019.

14.R.F.A. No. 33-B of 2019 (Chairman N.H.A & others - V- Mohib Ullah Khan& others) instituted on 04.11.2019, against the judgment and decree of Additional District Judge-Il/Referee Judge, Lakki Marwat dated 18.07 .2019

2.The aforementioned appeals, filed by private individuals/landowners and the National Highway Authority OIHA), challenge the legality and validity of the judgment and decree dated 18.07.2019, passed by the learned

Additional District Judge-Il/Referee Judge, Lakki Marwat, whereby the reference applications were decided and Award No.01 dated D.I.Khan the 20.05.2009 was modified and the compensation for commercial land, measuring 100-Kanal, 09- Marla, initially assessed at Rs.30,000/ per Kanal and for Barani/Rod Kohi land, measuring 182-Kanal, l5-Marla, preliminarily fixed at Rs.5482.15/- per Kanal, and for uncultivable barren mountains land, measuring 525-Kanal, 05-Marla originally assessed at Rs.2,529.281' per Kanal was enhanced to Rs.1,70,000/- per Kanal, along with 15% compulsory acquisition charges; however, interest at the rate 4 of 60/o on the enhanced amount was declined.

3.Brief facts of the case in hand are that the landed property measuring 808 Kanal and 09 Marla, in Mauza Pezu, Tehsil and District, Lakki Marwat was acquired for the extension of "Peshawar-D.I.Khan Road Project"$-55), NHA vide Award No.0l dated D.I.Khan the 20.05.2009.

4.The Collector Land Acquisition awarded the compensation for commercial land, measuring 100-Kanal, 09- Marla,at Rs. 30,000/ per Kanal and for Barani/Rod Kohi land, measuring 182-Kanal, l5-Marla, fixed at Rs.5482.151- per Kanal, and for uncultivable barren mountains land, measuring 525-Kanal, 05-Marla, assessed at Rs.2,529.281- per Kanal, along with l5%o compulsory acquisition charges and 60/o simple interest w.e.f. the date of taking over possession i.e.

26.12.2008 to 20.05 .2009.

5.The land owners challenged the assessed amount of compensation by filing separate applications u/s 18 of the Land Acquisition Act, 1894 (hereinafter to be referred as "the Act"), seeking enhancement of the awarded compensation.

The learned Referee Judge/Additional District Judge-IV, Lakki Marwat, after conducting a full-fledged trial, vide judgment and decree dated 23.04.2012, partially accepted the applicationsi objection petitions and enhanced the compensation of the acquired land, determining different rates for various Khasra numbers. The said findings of the learned Referee Court were challenged through several f Regular First Appeals.

6.This court vide judgment dated 26-10-2017, allowed the appeals and the judgments and decrees of the leamed Referee Courts were set aside and the applications/objection petitions were remanded to the Referee Court with direction to appoint a fresh local commission to determine market value of the land according to law and thereafter decide the case.

7.In compliance with the remand directions, the learned Referee Court appointed a fresh Local Commission, who submitted his report. Objections to the report were invited, and thereafter the Commission was examined as CW-01.

After hearing arguments of the parties, the learned Referee Judge, vide judgment and decree dated 18.07.2019, fixed the compensation for the acquired lands as follows:

a i. In reference No.3 (R) LA of 20L7 titled (Kifayatullah Khan & others -V- Chairman N.H.A & others),reference No.4 (R) LA of ZDl7titled (Haji Muhammad Yousaf Khan -V- N.H.A & others), and reference No.8 @) LA of 2017, titled (Mst. Bibi Sehra& others -V- Chairman N.H.A & others) at the rate of Rs. 1,70,000/- per Kanal.

ii. In reference No.S (R) LA of 2LlZ,titled (Mohib Ullah Khan & others -V- Chairman N.H.A & others)at the rate of Rs. 90,000/- per Kanal.

iii. In reference No.10 (R) LA of 2017, titled (Qutab Din & others -V- Chairman N.H.A & others), at the rate of Rs. 1,10,000/- per Kanal. 7 iv. In reference No.06 (R) LA of 20ll,titled (Mir Zali Khan & others -V- Chairman N.H.A & others), at the rate of Rs. 1,00,000/- per Kanal. v. The Referee Judge awarded l5Yo compulsory acquisition charges; however, it declined to grant interest at the rate of 6% on the enhanced amount.

8.Feeling aggrieved, the landowners/appellants as well as the NHA have called into question the order of the Referee Court dated 18.07 .2019 through the above cited appeals.

9.Arguments heard and record perused.

10.The Land Acquisition Act of 1894, which is the primary legislation governing land acquisition in Pakistan, has its roots in earlier laws established during the British colonial period. The historical background of this legislation can be traced back to the Bengal Regulation of 1824, which was the first piece of legislation in India regarding the

acquisition ofproperty. This regulation aimed to provide rules for govemment officers to obtain land or other immovable property at a fair valuation. The Land Acquisition Act of 1894 was enacted to consolidate and amend the laws relating to the acquisition of land for public purposes and to provide for the payment of compensation to the persons interested in such land. The Act was desigrred to facilitate the acquisition of land for various public projects, including infrastructure development, urban planning, a16 other governmental initiatives. It established a framework for the process of land acquisition, including the notification process, assessment of compensation, and the rights of landowners. Over the years, the Act has undergone several amendments to address various issues and to align with changing socio-economic conditions.

For instance, the provisions regarding compensation have been a focal point of contention, leading to judicial interpretations and modifications in the practice. The Act's application has been challenged in various cases, highlighting the need for fair compensation and adherence to principles of natural justice during the acquisition process. The Land Acquisition Act of 1894 emerged from a historical context of colonial land policies and has evolved through legislative amendments and judicial scrutiny to address the complexities ofland acquisition in Pakistan. The principles established by the apex court for determining compensation for acquired land are not often adhered to, leading to prolonged litigations

that incur significant costs to the national exchequer. Section 23 of the Land Acquisition act, 1894 provides elaborate guidelines for determination of amount of compensation of the acquired land that are to be considered at the time of fixation of compensation. Wisdom in this regard is sought from the case law reported as "Malik Tariq lvlahmood and others Vs. Prwince of Pmjab and others" (2023 SCMR 102). Para 7 of the judgment supra is reproduced for ready reference;

7.The quintessence of the above argwnents reminds us that the main issue to be resolyed in this case had two components. The /irst was about the natwe and classi/ication of the land, while the second related to its value. Before we enter upon cowidering the evidence addrced on the said issue, we deem it appropriate to state some of the principles on which compensation is required to be determined. Under section 2j(l) of the Act, compensation is to be determined on the basis of the markct value of the land at the date of publication of the notification under section 4 of the Act. The Cowt assessing compensation is required to takc into consideration not only the present purpose or the present use to which the land is applied but also any other more bene/icial purpose to which it might reasonably be put by the owner. Indubitably, it is truc that regard can be lwd only to the existing conditions and wlwt is likely to happen in reasonably near future and compensation cawtot be frxed 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 protitable we within a reasonable period the same cannot be ignored in

Pqe-9 -of 22

assessing its value. Compensation has always to be determined by reference to the price which a willing vendor may reasonably expect to obtain from a willing purchaser. When the land possesses some unusuol, special or uttique feqtwes as to its location or potentialities, &rc weight must be attached to all these elements. Afier considering all the circwnstances, the Cowt has to arrive at a fair estimate with reference to the surrounding circumstances and evidence in the case and to avard a fair compensation on that basis.

The Cowt ftrther ought to be liberal in the sewe that it should not be too meticulous or pedontic in dealing with the evidence. It is also true that an entry in the revenuc record as to the nattre of the land may not be conclusive. If the land acquired is found to be useful both for agricultwal or ran-agriculural pwposes, merely on the growd that it was used as agricultural land by the owner till the time of its acquisition, tts potentiality as non-agricultural land cannot be ignored.

It. Award No.l, pertaining to the acquired land, holds considerable significance. In its Part B, captioned

;D

it iE explicitly recorded that 20 individuals/landowners, in response to notices issued under Sections 9 and l0 of the Land Acquisition Act appeared before the Collector and claimed compensation for the lands at the rate ofRs. 300,000/- (Three lacs) to Rs. 600,000/-(six lacs) per Kanal. It is also recorded therein that no mutations were attested in Mauza Pezu due to the ban imposed by the Provincial Govemment, however, there is mention of certain sale deeds through which some properties in the area were

Page - l0'of22 n sotd.TheCollectorLandAcquisitionawardedthe compensation for commercial land, measuring 100-Kanal, Marla, at Rs. 30,000/ per Kanal and for Barani/Rod Kohi land, measuring 182-Kana1, l5-Marla, fixed at Rs.5482.15/- per Kanal, and for uncultivable barren mountains land, measuring 525 -Kanal, 0 5 -Marla, assessed at Rs.2,529 .28 I - per

Kanal, along with 15% compulsory acquisition charges and 6% simple interest w.e.f. the date of taking over possession i.e. 26.12.2008 to 20.05.2009.The rates were fixed on the basis of the one-year avetage rate, calculated from sale mutations attested during the preceding the date of publication of the notification under section 4 of the Land Acquisition Act. The learned Referee court had previously rejected the report of the local commission and proceeded to decide the case. Thereafter, this court directed the appointment of a fresh commission for redetermination of the market value of the acquired land in accordance with law.

The report of first Local commission, prescribed different compensation rates for different categories of land per Kanal, whereas the second local commission, in its report, stated that, according to his confidential information, the market price of the acquired land for different classes, at the relevant time, was betweenRs.90,000/- to Rs.1,70,000/-per Kanal. The learned Referee Court observed that there was a significant disparity in the assessed market value between the two reports submitted by the Local Commissions. In light of the above

Page-ll-of22 n observations, the learned Additional District Judge-Il/Referee Judge, Lakki Marwat, vide judgment and decree dated 18.07.2019, passed decided the reference applications and modified the Award No.01 dated D.I.Khan the 20.05.2009, and enhanced the compensation from initially assessed between 2529.28 and Rs.30,000/ per Kanal was enhanced to amounts ranging between 90000/- to Rs.170,000/- per Kanal along with 15% compulsory acquisition charges; however, interest at the rate of 6Yo on the enhanced amount was declined.

12.Since, the order of the Referee Court rejecting the first a commission's report was not challenged by either party, therefore, the same report cannot again be made the sole basis for determining the market value of the acquired land. However, there is no denial of the fact that the acquired land is situated in close proximity to the Bannu-D.I. Khan Road, which became a dual carriageway following the construction of the highway on the acquired land. Furthermore, the land lies in close proximity to village Pezu and as per the sketch attached to the second commission's report, several houses, shops and a petrol agency, are located in the immediate vicinity of the acquired land, suggesting that the acquired land was commercial and residential in nature. The second local commission ignored these facts while recording findings qua the market value of the acquired land. In view of the available record and evidence on file, it is evident that market

n value of the acquired land was not properly fixed by the learned Referee Court by relying solely on the report of local commission and ignored the futue potential value and commercial and residential usage of the land' As the matter has been pending adjudication for over a decade, this court does not consider it appropriate to remit the case once again to the learned trial Court for appointment of a fresh Local Commission merely on account of certain minor objections raised by the acquiring department. It is held that, in the interest ofjustice, the case ought to be decided on the basis of the available record.

\l The report of the Local Commission, the evidence adduced by the objectors, and the award itself collectively establish that the acquired land had the potential for commercial use and was likely to appreciate in value in the near future. In view of these factors, this Court is of the considered opinion that fixing compensation for the acquired land at the rate of Rs.600,000/- (six lac) per kanal would meet the ends of justice. Guidance in this regard is drawn from the judgment reported as '.WAPDA through Chairman and others vs. Alam Sher and others." (2023 SCMR 981).

Relevant excerpt from paragraphs 06 and 07 of the aforesaid judgment is reproduced hereunder for ready reference

6.There is no denial to this fact that the order of the learned Peshawar High Court dated 13.05.201i by which the matter was remanded back to the learned

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n market value of the land was Rs.25000/- per Kanal. Mr. Muhammad Ghazanfar Ali, Advocate, who was appointed Local Commtssioner also appeared before the learned Trial Court and recorded his statement as CW-|. He was put to lengthy cross-qcamination by the appellants but no deficiency in his report could be brought on record. Mode of determtning the compensation of acquired land is provided in section 23 of the Land Acquisition Act, 1894, which depicts that the landowner is entitled to compensation and not just market value, as such, any loss or tniury occastoned by its severing from other property of the landowner, by change of residence or place of f business and loss of pro/its are also relevant factors.

While conducting said exercise, oral evidence, iffound credible and reltable can also be taken into consideration. The requirement of Article 71 of the Qanun-e-Shahadat Order, 1984, sqtnrely requires that it should be produced directly if the same is in oral form. We have noticed that in the present case, the oral evidence came from a source, which no doubt can be termed as direct, because the other landowners and property dealers were of the same vicinity and were frlly aware of the market/potential value of the land. Even otherwtse, the oral statements of the other landowners and property dealers of the same vicinity had been corroborated with other evidence produced on record, such as, (i) certain mutations in respect of the same mouza, (ii) two years cmerage for the period 01.01.2002 to 01.0L2003 (Ex.PW-j/25), (iii) alrsshajrakishtwar and (iv) khasragirdautri (Ex.PW- 3/2), which revealed thqt there was cultivation in the suit properA up tu the year 2004. Learned counselfor the appellants had argued that pursuant to an amendment in section 2 j of the Land Acquisition Act,

n 1894 by the province of KPK, the compensatton has to be determined according to the market value of the land on the date of taking possession of the land. Before proceeding further, it would be in order to reproduce the relevant provision of Land Acquisition Act, 1894, which reads as under: -

"23. Matters to be considered in determining compensotion. (1) In determining the amount of compensation to be awarded fo, land acquired under this Act, the Court shall take into 4 consideration: First, the market'value of the land at the date of the publication of the noti/ication under section 4, subsection (I).

7.This provision stands amended by the NWFP Amendment Ordinance XVil of 2001 in the following terms:-

"First, the market value of the land on the date of taking possession of the land."

13.While determining compensation under Section 23 of the Land Acquisition Act, 1894, the courts are required to adopt a considerate and sympathetic approach when adjudicating the claims of individuals whose property has been compulsorily acquired by the State against their will for public purposes. Reliance in this regard is placed on the judgment reported as "National Highway Authority vs. Rai Ahmad Nawaz Khan and others" (2023 SCMR 700).

Relevant excerpt from paragraph 8 of the said judgment is reproduced hereunder for ready reference:

8.It is important to state that the intention of the legislature behind section 23 was that whenever a

n Court is determining the quantum of compensation to be au,arded 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 compulsortly taken by the state against their will for a public purpose. Section 23 allows a Court to cornpensate such landowners for giving up their properties for the greater good, on the doctrine of individual rights must tve way to the greater public interest (salwpopuli suprema lexesto).

a 14. Before proceeding further, it is essential to address a pertinent legal question: whether the Referee court or this Court in appellate jurisdiction can enhance the compensation beyond the amount specifically claimed by the landowners in their reference appltcations? The answer to this question is firmly rooted in the principles of justice and statutory interpretation under the Land Acquisition Act, 1894. The august Supreme Court of Pakistan, in its authoritative pronouncement reported as "Government of Pakistan through Secretary, Ministry of Defence, Ranalpindi Military Estates Officer, Hazara Circle, Abbottabad ond another v. Itht.

Ayesha Bibi (widow) and others" (2024 SCMR 1323) has conclusively held that the Referee Court may enhance compensation beyond the amount claimed in the reference application, provided that the evidence produced by the parties justifies such enhancement in accordance with Section 23 of the Act. Paragraphs 12 and 13 of the said judgment categorically state that the landowners, whose property has

been taken through the exercise of eminent domain, are entitled to fair market value, and that strict adherence to procedural safeguards undet Sections 9 and 25 of the Act is vital. Furthermore, it was emphasized that faimess demands compensation not be arbitrarily capped by the originally claimed amount if the evidence reveals a higher valuation' The Supreme Court thus held:

"...in cases, where there is a faihtte of strict compliance of the said provisions of the Act, and in particular Sections 9 and 25, then the Referee Cotrt may proceed to adiudge the compensation for the acquired property beyord the amount claimed by the landowners in the reference applications, if the evidence produced by the parties iustify such enlwncenent in accordance with Section 23 of the Act..."

15.As an appeal is a continuation of the original proceedings, the High Court is comPetent to apply the procedural and substantive provisions governing the original proceedings by invoking Sections 53 and 54 of the Land Acquisition Act, 1894 r/w 5.107(2) of the Code of Civil Procedure, 1908. In view of the above legal position, the Referee Court, and this Court in appellate jurisdiction, has the lawful authority to award compensation in excess of the amount claimed by the landowners, where the record and evidence on file support such an enhancement. Any objection to this enhancement merely on the ground of being beyond the initial claim amount is thus devoid of legal merit.

16.The learned Referee Court declined to award 60/o interest on the compensation amount on the gfound that the relevant provision had been deleted from the statute book.

However, in view of the latest amendment to Section 28 of the Land Acquisition Act, 1894, it is evident that the award of 6% simple interest has not been deleted. For better understanding, the amended Section 28 is reproduced below, which reads as follows:

a Section. 28: Collector may be direcled to pay interest on occess 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 whtch the Collector did mvard as compensation, the nvard of the Court may direct that the Collector shall [deposit with the court such amount as determined by itJ. (K.P.K Amendmentt

17.In section 28, for 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," the words "deposit with the Court such amount as determined by it" shall be substituted. By virtue of amendment to section 28 of the Land Acquisition Act, 1984, as made by the Khyber Pakhtunkhwa legislature, the phrase pertaining to the payment of interest on the excess amount @ Rs. 6%owas deleted, however, under the amended provision, the Collector is required to deposit the excess amount as determined by the Referee Court, before the court. If the excess amount is deposited in accordance with

a\ the amended provision, no interest shall be levied on such amount. Conversely, in the event of failure, on the part of the Land Acquisition Collector or the acquiring department to deposit the excess amount before the Referee Court, they may not be absolved of their liability to pay interest on the said amount. No doubt, the award of interest under section 28 of the Land Acquisition Act,1894 is discretionary in nature and the Court may exercise such discretion judiciously, while passing an appropriate order. However, section 34 of Land .-a Acquisition Act, 1894 as amended by the Khyber w Pakhtunkhwa legislature, provides that where the amount of compensation is not paid or deposited on or before the taking possession of the land, the Collector shall be liable to pay the amount awarded amount along with simple interest at the rate of 6Yo per annum from the date of taking possession, until the amount is so paid or deposited. The language employed in the amended section 34 is mandatory in nature obligating the Collector to pay compensation along with interest to be calculated from the date of taking possession until the final payment or deposit of the excess amount is made.

In the award, it is specifically admitted that the acquiring department took possession of the acquired land on 24-04-2009 and the parties are not in dispute on this point.

Although, section 28 of the Land Acquisition Act, 1894 has been amended by the province of Khyber Pakhtunkhwa, the amendment did not delete the provision for payment of 6Yo

A

simple interest. Under the amended law, the Collector remains bound to pay 60/o interest on the amount of compensation determined by the court which exceeds the amount already deposited. In the present case, while the collector is not liable to pay 6% simple interest on the portion of compensation already deposited in court, he is obligated to pay 60/o simple interest on the amount adjudged by the court to be in excess of the initial deposit. Guidance in this regard is derived from the case law reported as "Nawabzada Abdul Qadir Khan and others Vs. Land Acqutsition Collector, Mardan and others". (2023 SCMR 950). Para 7 of the a judgment supra reads as under;

7.Corning to the points raised by the Additional Afuocate Generals fo, KP, we note that section 34 of the LAA 1894 has never been repealed by the KP Provincial Assembly, and therefore have no qualms in arriving at the conclusion that the imposition of six- percent interest imposed by both the Courts had been done in accordance with lan. To that extent, the Additional Advocate Generals, KP hatte not been able to point out any illegality in the imposition of the six per cent interest by both the Courts below. Section 34 of the LAA 1894 still holds the Jield and continues to do so. It is, however, important to clarify that unlike riba/interest that accrues out of a /inancial obligation between the parties, the word "interest" in section 34 of the LAA 1894 is not interest strictosensu. The interest awarded to landowners under section 34 is compensatory in nature that allows the Court to compensate the landowners for the financial loss landowners would suffer from the date of acquisition

n till payment of compensation by the acquiring authority. Unlike a /inanctal transaction, where parttes are often assumed to be equal in bargaining power and are deemed to be consenting to a transaction, an exercise of eminent domain cannot in any sense be construed as either a consenting transaction between the parties involved (i.e. the State and the landowners) nor can it be assumed by any stretch of imagination that the state and the landowners are equal in terms of bargaining power. Emtnent domain is, after all, a unilateral power of the government and no consent from the affected landowners is required under the law before the state can exercise eminent domain under the LAA 1894.

V Even otherwise, as held by this Court in the case of Shetkh Muhammad Ilyos Ahmed v. Pakistan through Secretary, Ministry of Defence (PLD 2016 SC 64), the benetit of section j4 is statutory in nature and such bene/it cannot be withheldfrom the landowners on the ground that interest has been declared against the injunctions of Islam on the ground that interest has been declared against the injunctions of Islam.

18.In light of the foregoing discussion, it is held that the findings of the learned Referee Court warrant interference in exercise of appellate jurisdiction; Accordingly, the appeals of the objectors/landowners are partially allowed and the impugned judgments and decrees are modified to the extent that the compensation for the acquired land is fixed at the rate of Rs. 6,00,000/- (six lac) per Kanal. The objectors shall also be entitled to simple interest of 6 % per annum on the amount of compensation determined in excess of the amount already deposited in the Referee Court along with 15 % compulsory

n acquisition charges. Conversely the appeals filed by the National Highway Authority (NHA) are dismissed being devoid of merit.

Announced Dt:23.06.2025.

Imran/*

(s.8.)

Hon'ble Mn Justice MuhammadTariq Afidi

seuswD t l

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