JUDGMENT SHEET

IN THE PESHAWAR HIGH COURT, D.I.KHAN BENCH

(Judicial Department)

R.F.A No.73-D of 2012

JUDGMENT

Date of hearing 02.03.2015

Petitioner(s)/Appellant(s) (Jamil Ahmad) by

Mr. Abdullah Khan Gandapur Advocate

Respondent(s) Govt. of K.P.K) by

Mr. Sanaullah Shamim A.A.G

IKRAMULLAH KHAN, J.- Through this single judgment, I

intend to dispose of instant RFA No.73-D/2012 and

connected RFA No.93-D/2012 as both the appeals are the

outcome of one and the same judgment and decree dated

03.4.2012 rendered by learned Additional District Judge-

VI/Referee Judge, D.I.Khan.

2. In essence, certain land of Jamil Ahmad and

others (hereinafter called as appellants) was acquired for

construction of ‘Janaza Gah’ at village Abdul Khel, Tehsil

Paharpur, District D.I.Khan through award No.770-

75/TLA®-138 dated 10.11.2007 at a nominal price of

Rs.6521/46 per kanal.

3. Feeling aggrieved, the appellants filed a reference

petition under section 18 of the Land Acquisition Act which

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was referred to learned trial Court. The learned trial Court

framed the required issues from the pleadings of the parties.

The parties produced their respective evidence as they

wished to adduce. After hearing the arguments of learned

counsel for the parties, the learned Additional District Judge-

VI/Referee Judge, D.I.Khan partially accepted the reference

of appellants and enhanced the rate of compensation to the

tune of Rs.50,000/- per kanal alongwith usual acquisition

charges.

4. Dissatisfied with the rate of compensation so

fixed, both the parties have filed above mentioned appeals.

5. The learned counsel for appellants contended that

the judgment of the learned Referee Judge is against law and

the principles enunciated by the superior Courts time and

again in this regard; further contended that the property

acquired by respondents was of a great potential, but the

learned Referee Judge has not considered the same, therefore

fell in error of law in determination of fair market rate of the

suit property.

6. On the other hand, the learned counsel for official

respondents supported the impugned judgment and

contended that the suit land was barren having no any

potentiality in future while the land has been acquired for the
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benefit of the whole community and appellants are the

ultimate beneficiary, to use the land as graveyard.

7. I have heard learned counsel and have through the

record.

8. The record reveals that the property under

consideration had acquired the status of village site, as per

report of the local commission, people of the village had

constructed houses around the property which were adjacent

to the main general road, some shops and a filtration plant

was existing on one side of the property under consideration.

In case of Province of Punjab through Land Acquisition

Collector Vs. Begum Aziza (2014 SCMR 75) the Apex

Court has laid down the following principles germane to

section 23 of Land Acquisition, which are as follows;

“In Abdur Rauf Khan v. Land Acquisition

Collector/D.C. (1991 SCMR 2164) this court
while dilating upon the question of rate of
compensation laid down following principles
germane to section 23 of the Land Acquisition
Act which may be kept in view. Those are as
follows:--

"(i) That an entry in the Revenue Record

as to the nature of the land may not be
conclusive, for example, land may be shown in
Girdawari as Maira, but because of the
existence of a well near the land, makes it
capable of becoming Chahi land;

(ii) That while determining the

potentials of the land, the use of which the
land is capable of being put, ought to be
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considered;

(iii) That the market value of the land is

normally to be taken as existing on the date of
publication of the notification under section 4(1)
of the Act but for determining the same, the
prices on which similar land situated in the
vicinity was sold during the preceding 12
months and not 6-7 years may be considered
including other factors like potential value etc."

7. The afore-referred ratio was reiterated with

greater depth in Murad Khan v. Land
Acquisition Collector (1999 SCMR 1647)
wherein the court found that though the
expression "market value" appearing in section
23 of the Land Acquisition Act has not been
defined but its import can be appreciated from
the precedent case-law. The Court deduced
from the precedent case-law the following
principles:--

(i) The data from which the market value of the

land can be estimated is given in Rule 13 of the
North-West Frontier Province Circular No.54
issued presumably under section 55 of the Act.
(Premier Sugar Mills Limited v. Hayatullah
Khan (PLD 1956 (W.P.) Pesh. 67).

(ii) The best method to work out the

market value is the practical method of a
prudent man laid down in section 3 of the
Evidence Act to examine and analyse all the
material and evidence available on the point
and to determine the price which a willing
purchaser would pay to willing seller of the
acquired land. "The Land Acquisition Collector,
Rawalpindi v. Lieut. General Wajid Ali Khan
Burki (PLD 1960 (W.P.) Lah. 469).

(iii) Subsection (1) of section 23 of the Act

provides that in determining the amount of
compensation the Court shall take into
consideration the market value, loss by reason
of severing such land from his other land,
acquisition injuriously affecting his other
property or his earning in consequence of
change of residence or place of business and
damage, if any, resulting from diminution of the
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profits of the land between the time of the

publication of the declaration under section 6
and the time of the Collector's taking possession
of the land. This, however, is not exhaustive of
other injuries or loss which may be suffered by
an owner on account of compulsory acquisition.
(Province of West Pakistan and another v. M.
Salim Ullah and others (PLD 1966 SC 547).

(iv) The best method of determination of

the market price of the plots of land under the
acquisition is to rely on instances of sale of it
near about the date of notification under section
4(i) of the Act. The next best method is to take
into consideration the instances of sale of the
adjacent lands made shortly before and after the
notification. When the market value is to be
determined on the basis of the instances of sale
of land in the neighbouring locality, the
potential value of the land need not be
separately awarded because such sales cover
the potential value. (Jogendra Nath Chatterjee
and others v. State of West Bengal (AIR 1971
Calcutta 458).

(v)It is obvious that the law provides

determination of compensation not with
reference to classification or nature of land but
its market value at the relevant time. No doubt,
for determining the market value, classification
or the nature of land may be taken as relevant
consideration but that is not the whole truth. An
area may be Banjar Qadeem or Barani as in the
present case but its market value may be
tremendously high because of its location,
neighbourhood, potentiality or other benefits.
(Pakistan and another v. Rehm Dad and another
(1980 CLC 574.).

(vi) According to the well-settled principle,

while determining the value of the compensation
the market value of the land at the time of
requisition/acquisition and its potentiality have
to be kept in consideration. (Pakistan v. Din
Muhammad and others (1983 CLC 1281).

(vii) Consideration should be had to all the

potential uses to which the land can be put, as
well as all the advantages, present or future,
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which the land possesses in the hands of the

owners. (Mst. Khatu and others v. Barrage
Mukhtiarkar, Thatta (PLD 1977 Kar. 203).

(viii) In determining the quantum of fair

compensation the, main criterion is the price
which a buyer would pay to a seller for the
property if they voluntarily entered into the
transaction. (Din Muhammad v. General
Manager, Communication and others (PLD
1978 Lah. 1135).

(ix) The measure of fair compensation is

the value of the property in open market which a
seller voluntarily entering into a transaction of
sale can reasonably demand from a purchaser
this means that we, have to determine the value
of the land in the open market at the relevant
time on the assumption that the notification of
acquisition did not exist. (Province of Punjab v.
Sher Muhammad and another (PLD 1983 Lah.
578).

(x)While determining the value of the land

acquired by the Government and the price
which a willing purchaser would give to the
willing seller, only the past sales' should not be
taken into account but the value of the land with
all its potentialities may also be determined by
examining (if necessary as Court witness) local
property dealers or other persons who are likely
to know the price that the property in question is
likely to fetch in the open market. In appropriate
cases there should be no compunction even
relying upon the oral testimony with respect to
market value of the property intended to be
acquired, because even while deciding cases
involving question of life and death, the Courts
rely on oral testimony alone and do not insist on
the production of documentary evidence. The
credibility of such witnesses would, however,
have to be kept in mind and it would be for the
Court in each case to determine the weight to be
attached to their testimony. It would be useful
and even necessary, to examine such witnesses
while determining the market prices of the land
in questions because of the prevalent tendency
that in order to save money on the purchases of
stamp papers and to avoid the imposition of
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heavy gain tax levied on sale of property, people

declare or show a much smaller amount as the
price of the land purchased by them than the
price actually paid. The previous sales of the
land, cannot, therefore, be always taken to be
an accurate measure for the determining the
price of land intended to be acquired. (Fazalur
Rehman and others v. General Manager,
S.I.D.B. and another (PLD 1986 SC 158).

(xi) The sale-deed and mutation entries do

serve as an aid to the prevailing market value.
(Government of Pakistan v. Maulvi Ahmed
Saeed (1983 CLC 414).

(xii) It is a well-settled law that in cases of

compulsory acquisition effort has to be made to
find out what the market value of the acquired
land was or could be on the material date.
While so venturing the most important factor to
be kept in mind would be the complexion and -
character of the acquired land on the material
date. The potentialities it possessed on that date
are also to be kept in view in determining a fair
compensation to be awarded to the owner who
is deprived of his land as a result of compulsory
acquisition under the Act. (Central Government
of Pakistan v. Sardar Fakhar-e-Alam and
another (1985 CLC 2228).

(xiii) The value of the land of the adjoining area

which was simultaneously acquired and for
which different formula of compensation has
been adopted, should be taken into
consideration. (Raza Muhammad Abdullah
through his Legal Heirs v. Government of
Pakistan and others (1986 MLD 252).

(xiv) The phrase "market value of the land"

as used in section 23(1), of the Act means "value
to the owner" and, therefore, such value must be
the basis for determination of compensation.
The standard must be no, subjective standard
but an objective one. Ordinarily, the objective
standard would be the price that owner willing
and not obliged to sell might reasonably expect
to obtain from a willing purchaser. The property
must be valued not only with reference to its
condition at the time of the determination but its
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potential value must be taken into

consideration. (Abdul Wahid and others v. The
Deputy Commissioner (1986 MLD 381)."

8. The learned Referee Court neither adverted

to the afore-mentioned principles nor
appreciated the evidence in proper perspective.
There is yet another aspect of the matter which
may have a bearing on the value of the property.
The notification under section 4 of the Act was
published on 27-4-1981; two corrigenda were
issued on 6-10-1982; notification under section
5 was published on 20-7-1983; the declaration
under section 6 was published on 1-2-1984 and
the award was announced on 28-3-1985. Thus it
took four years for appellants to complete the
acquisition proceedings. The prices may have
escalated during this period and this escalation
has to be kept in view while assessing the
potential value of the land. This is in line with
the law laid down by this Court in Province of
Sindh v. Ramzan (PLD 2004 SC 512), Abdul
Majeed etc. v. Muhammad Subhan etc. (1999
SCMR 1245 at 1255) and Pakistan Burma Shell
Limited v. Province of N.-W.F.P. etc. (1993
SCMR 1700).

In case of Askari Cement Limitted (Formerly Associated

Cement Limited) through Chief Executive Vs. Land

Acquisition Collector (Industries) Punjab and others (2013

SCMR 1644) the Apex Court has held as

“For determining proper rate of compensation

for the acquired land, not only the factors
highlighted in Ss.23 & 24 of Land Acquisition
Act, 1894 were relevant, but the peculiar facts
and circumstances of each case were more
important deciding factors in such regard.”
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As discussed hereinabove, it shall not be only the market

value of the land under acquisition, but other factors, which

by any means affect the interest of a land owner, shall be

also considered for determination of compensation to be

awarded to a land owner in lieu of his property. The land

under consideration, according to the report of local

commission, is useful for construction of houses and which

is adjacent to general road, has a great potentiality in future,

but the learned Referee Court has not considered this aspect

of the case in view of section 23 of the Land Acquisition

Act.

9. For the reasons given hereinabove, RFA No.73-

D/2012 is accepted and the compensation amount is

enhanced to Rs.1,00,000/- per kanal with 15% compulsory

acquisition charges and 6% simple interest on the enhanced

amount from announcement of this judgment till the

realization of the enhanced money, while RFA No.93-

D/2012 filed by the Collector, D.I.Khan and others is

dismissed according having no merit at all.

Announced.
Dt:02.3.2015.
Habib/* JUDGE