Pakistan Case Law
2016 PLJ SC 111, 2016 PLD Supreme Court 64

Sheikh MUHAMMAD ILYAS AHMED and others vs PAKISTAN through Secretary

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Citation2016 PLJ SC 111, 2016 PLD Supreme Court 64
CourtSupreme Court of Pakistan
Judge(s)Anwar Zaheer Jamali, Amir Hani Muslim, Umar Ata Bandial
ResultOrder accordingly
AI Summary — generated from this judgment; read the full text below and verify before relying on it.

These civil appeals were filed before the Supreme Court of Pakistan seeking enhancement of compensation and the award of interest under the Land Acquisition Act, 1894. Following the condonation of delay, the appellants restricted their prayer to the non-awarding of interest on the compensation amount, as mandated by statute. The core legal question was whether the appellants were entitled to compound interest on the compensation for land acquired by the state. The Supreme Court held that the awarding of interest under Section 34 of the Act is statutory in nature and cannot be withheld without valid reasons. The Court observed that both the lower courts had overlooked this mandatory provision. Consequently, the appeals were partly allowed, with the Court directing that the appellants be granted compound interest at the rate of eight percent per annum from the date of taking possession of the acquired land until the final payment of compensation. The judgment reaffirms that statutory interest on land acquisition compensation is a mandatory entitlement.

Laws & provisions referred
  • Section 34 of the Land Acquisition Act, 1894
land acquisitioncompensationstatutory interestcompound interestcondonation of delaySection 34 Land Acquisition Actcivil appeal

' ANWAR ZAHEER JAMALI, C J.--For the reasons set out in the applications for condonation of delay, the delay in filing of these appeals is condoned and the appeals are taken up for hearing on merit.

2. At the outset, learned ASC for the appellants has made a statement at the bar that in view of announcement of judgment by this Court today in connected Civil Appeals Nos.1120 to 1124 of 2014, the appellants are not pressing these appeals for seeking further enhancement in the amount of compensation, but only to the extent of non awarding of interest on the amount of compensation, as mandated under section 34 of the Land Acquisition Act, 1894 (in short "the Act of 1894"), which has been withheld for no valid reasons.

3. A bare reading of above referred provision of the Act of 1894 reveals that awarding of such interest is statutory in nature, which cannot be withheld. Thus, the appellants are fully entitled for grant of compound interest at the rate of eight percent per annum from the date of taking possession of acquired land till the date of payment of its compensation, but for no valid reasons, such relief has escaped the sight of the two Courts below.

4. This being the position, these appeals are partly allowed to the extent that the appellants will also be entitled for compound interest at the rate of eight percent per annum from the date when possession of the acquired land was taken over from them till the time, compensation in terms of the impugned judgment dated 10.4.2014, is paid to them.

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