SC upholds fair land compensation
The Supreme Court has ruled that the state's inherent power to compulsorily acquire private property for a public purpose is not absolute, declaring that courts have a constitutional duty to ensure landowners receive fair compensation that reflects the true value of their property rather than arbitrary or outdated assessments.
In a detailed 20-page judgment authored by Justice Muhammad Ali Mazhar, a division bench upheld the Peshawar High Court's (PHC) decision to enhance compensation for privately acquired land in Swabi district. The ruling lays down broad legal principles governing compulsory land acquisition, emphasising that constitutional guarantees protecting property rights must be balanced against the state's power of eminent domain.
The judgment also cautioned acquiring agencies against delaying acquisition proceedings, observing that prolonged delays coupled with outdated valuation methods unfairly deprive landowners of just compensation.
It directed courts to take into account inflation, appreciation in land prices and the property's future potential while determining compensation.
"The role of the Court is to ensure fair compensation in acquisition of property as guardian of constitutional rights. Though the doctrine of eminent domain is the inherent power of the State to compulsorily acquire private property for a public purpose even against the owner's will but this power is not absolute and is strictly regulated by the Constitution to prevent the despotic exercise of state authority while cautiously maintaining balance with the fundamental rights of citizens," the judgment states.
The bench further observed that one of the judiciary's foremost responsibilities is to ensure compensation genuinely reflects the actual value of the acquired property.
"The most recognisable work of fiction is structured on the metaphor 'gold for gold' not copper for gold' which is predominantly put in as judicial principle for guaranteeing just and fair recompense so that the owner must not be left in a sorrier financial crunch but receive money that is no less than the loss imposed in the public interest or for public good."
Explaining the concept of market value, the court said it represents the amount that a willing buyer would ordinarily pay a willing seller.
"The dogma of potential value enlightens the land's future prospective use which also needs to be considered by the Courts for corrective measures. If the compensation is not fully rational, the Courts may upset or enhance the amount of compensation, including if the amount is found to be grounded on outmoded valuation rates or the award seems to be unreasonable or manipulated."
The judgment also expressed concern over delays in acquisition proceedings, saying authorities often prolong both compensation payments and possession of land.
"The acquiring agency cannot sleep over the acquisition proceedings. It is quite commonly observed that the acquisition proceedings and payment of compensation are delayed for an unlimited period of time and the land owners remain deprived of fair compensation for their acquired land."
"Even the possession of property is delayed due to lackadaisical attitude of land acquisition officers which also creates complications. In point of fact, the period flanked by the initial notification and the final award is an essential ingredient and key factor for determining the price," it observed.
The court added that where acquisition proceedings remain pending for years, compensation based solely on the property's value at the time of notification cannot be regarded as fair.
"If acquisition proceedings are delayed for years including taking over the possession of land, the market value depicting from the date of notification can no longer be construed just and fair, rather, the Court must apply inflationary trends and potential value doctrine to account for the sharp-witted rise in the land prices and inflation that ensued due to deep slumber of the acquiring department."
The judgment outlined several factors courts should consider while determining a property's potential value, including its proximity to highways, bypasses, industrial zones, transport links and civic amenities.
It also said that where a large tract of land is acquired for a single project, individual plots should not be undervalued, while agricultural land located amid commercial development should be assessed in light of its actual development potential.
"The Courts every so often, sentient to the doctrine of collective justice, strike a balance between public and private interests."
The bench noted, "On the face of it, the key takeaway in this case was the determination of fair compensation of acquired land rather than acquiring it at an improbable or throwaway price."
"No doubt the acquisition of land in the public interest is so sacrosanct but at the same time, the payment of fair compensation is also inevitable and unescapable to safeguard the fundamental right of owning and enjoying the property rights," it further stressed.
The Supreme Court also underscored the importance of appellate jurisdiction, holding that the right of appeal is a substantive legal right available to an aggrieved party.
"It is a solemn duty of the court to undo injustice caused by patent errors. The appellate court acts as a curative forum to ensure that justice is not compromised by errors in the lower tiers of the judiciary because a right of appeal is not merely a procedural step but a substantive right of a litigant which is considered in continuation of the original proceedings."
The judgment further recognised property rights as a universally accepted fundamental human right.
"According to the mandate of Article 23 of the Constitution of Islamic Republic of Pakistan 1973, (Constitution) every citizen has the right to acquire, hold and dispose of property in any part of Pakistan, subject to the Constitution and any reasonable restrictions imposed by law in the public interest whereas Article 24 accentuates that no person shall be deprived of his property save in accordance with law and no property shall be compulsorily acquired or taken possession of save for a public purpose, and save by the authority of law which provides for compensation therefore and either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined and given."