THE LAND ACQUISITION ACT (I OF 1894) Versus THE LAND ACQUISITION ACT (I OF 1894)

TANZIL‑UR‑RAHMAN, C J. ‑‑‑The Federal Shariat Court examined on its own motion the Land Acquisition Act, I of 1894 and by its judgment dated 27‑3‑1984 directed the Government of Balochistan, N.‑W.F.P., Punjab and Sindh to amend the said Land Acquisition Act as under and to provide that:‑‑

(1) The notification under section 5 of the Act shall issue not later than one year from the date of publication of notification under section 4, failing which the acquisition proceedings shall be deemed to have come to an end. However, any time spent in the prosecution of a judicial remedy during which the acquisition proceedings are stayed by the Government before the issuance of notification under section 5 shall be computed to the prescribed period.

(2) After the publication of notification under section 5, the Commissioner shall within six months issue a declaration under section 6 of the Act, and if no notification of such declaration is issued within the said prescribed date, the acquisition proceedings shall be deemed to have come to an end. However, any time spent in the prosecution of judicial proceedings in which a stay order is issued after the issuance of notification under section 5 and before the issuance of notification under section 6 shall be computed to the above period of six months.

(3) After the publication of declaration under section 6 of the Act, the Land Acquisition Collector shall announce the award within a period of six months, failing which the officials/officers found guilty for the inordinate delay shall reimburse the Government for the amount of additional compensation at the rate of 15% per annum paid on account of said inordinate delay.

(4) Every objection received by the Collector under section 5‑A of the Act, shall be disposed of by the Collector with the least possible delay and his report under, subsection (2) thereof or recommendations under subsection (3), as the case may be, shall be forwarded to the Commissioner within a period of ninety days from the date of publication of the notification under section 5. The decision of the Commissioner on these objections shall be announced by him within a period of three months from the date of receipt of the report or the recommendation of the Collector, as the case may be. If the report of the Collector or his recommendations as the case may be, are not forwarded to the Commissioner, or if the decision of the Commissioner is not announced within the period specified in this rules, the objection shall be deemed to have been carried and ,acquisition proceedings shall come to an end.

(5) In addition to the compensation fixed on the basis of market value as prevailing on the date of notification under section 4, an amount of 15% per annum shall be paid as additional compensation to the person found entitled to compensation from the date of notification under section 4 to the date of payment of compensation.

(6) The person entitled to compensation shall be paid the cost incurred by him actually and reasonably for preparing his claim for compensation and putting his case before the Collector who may disallow, wholly or partly, the costs incurred by any person for compensation is extravagant.

(7) Consequential amendments necessitated by the above para shall be made in sections 18, 11), 20 and section 31 to the following effect.

(i) That full stop at the end of subsection (1) of section 18 be changed to comma and the words "or the amount of costs allowed" be added.

(ii) After the words "amount of compensation" in clause (c) of section 19, the words "and of costs (if any)" be added.

(iii) After the words "amount of compensation" in clause (c) of section 20, the words "or costs" be inserted.

(iv) After the word "compensation" in subsection (1) of section 31 and after the words "the compensation" in subsection (2) the words "and costs (if any)" be inserted.

2. Appeals were preferred against the above judgment of this Court before the Shariat Appellate Bench of the Supreme Court vide Shariat Appeal No.22 of 1984 filed by the Province of Punjab and Shariat Appeal No.4 of 1985 filed by the Province of N.‑W.F.P., and the said Bench of the Supreme cour t has been pleased to remand the case with the observation that "the specific repugnance and the extent of it should be clearly specified and the directions given should be in terms of the Constitutional authorization contained in clause (2) of Article 203‑D of the Constitution so that the consequences provided in clause (3) of the same article follow. The decision of the Federal Shariat Court does not satisfy the requirements of Article 203‑D of the Constitution and for that reason could not be sustained' (vide judgments dated 13‑1‑1988 in Shariat Appeal No.22 of 1984 and 20‑1‑1988 in Shariat Appeal No.4 of 1985).

3. On remand the matter was reheard on 24‑4‑1988 to 27‑4‑1988 and thereafter on 2‑5‑1988 and 8‑5‑1988 by the Full Court and again on 13th and 14th November, 1988. Then the matter was reserved for judgment, but as no judgment could be written, the matter was again fixed for rehearing, on 27‑4‑1989 before the Full Court but was adjourned to a date in office which remained pending throughout till the term of the then Hon'ble Chief Justice and all Judges except Dr. Fida Muhammad Khan, expired. It was then fixed on 4‑2‑1992, but was adjourned on the request of the counsel. It was then fixed on 13‑4‑1992 when Hafiz SA. Rahman, learned counsel for the Federation and Sindh and Mr. Shahabuddin Burq, Law Officer, N.‑W.F.P., were heard. The case was adjourned to 14‑4‑1992 as none for the Government of the Punjab was present, with the direction to contact on telephone the Assistant Advocate‑General, Punjab for his arguments on the next day of hearing. On 14‑4‑1992 Mr. Muhammad Aslam Uns, Advocate, on behalf of A.G., Punjab appeared. Hearing concluded and the matter was reserved for judgment. However, none appeared for the Province of Balochistan.

4. It seems that this Court vide its earlier judgment did not find any repugnancy to the market value of the land acquired, as the basis, for compensation. But there is another aspect of the matter relating to the fixation of market value which requires consideration by us as to whether (i) the value of the land to be acquired should be fixed in relation to the date of notification under section 4 of the Land Acquisition Act when what is intended is entry on and survey of the land for determination of its suitability for acquisition or otherwise or (ii) the date of actual acquisition as contemplated by the Act. What is thus required in the remanding order is:‑‑

(i) The basis in Shari'ah for fixation of compensation at the market value whether on the date of notification under section 4 of the Land Acquisition Act or on the date of actual acquisition after the disposal of objections.

(ii) The basis in Shari'ah for further compensation on account of delay in the payment of compensation @ 15% per annum.

5. As far as the first point is concerned, there are a number of Injunctions of Islam, which provide principles, guidelines and real standards for the fixation of compensation in matter of compulsory acquisition of any property by the State.

6. Verse 29 of Surah Al‑Nisa is of a basic character wherein it is ordained:‑‑

"O ye who believe, eat not up your property among yourselves in vanities. But let be amongst you traffic and trade by mutual goodwill. (Al‑Nisa; 4:29)",

The above Verse of the Holy Qur'an indicates that in general only such transactions are lawful which conclude on the basis of mutual consent, otherwise the transaction will become unlawful, and will amount to eating up the properties of the people in vanities. Thus, if the consent of the person, whose land has been acquired, was not obtained at the time of acquisition, the obtaining of his consent should not be neglected at the time of fixation of compensation of his property.

7. The people of Madyan were merchants. They used to do fraud and injustice. The Holy Qur'an ordained that:‑‑

"Give just measure and cause no loss (to others by fraud) And weigh with scales true and upright. And withhold not things justly due to men. (Al‑Shu'ara; 26:181‑183).

The word `Bukhs' means decrease, which can be done by some fraudulent way in the price of a thing, which is, in fact, eating up the property of the people in vanities. (Al‑Qurtubi: Al‑Jami'li Ahkam al Qur'an Vol.7, p.248).

8. Ibn Kathir in his Tafsir Al‑Qur'an al Azim, Beirut, Vo1.2, p.231, writes that "to make decrease in measurement by some fraudulent way is called Bakhs. The verse commands that to measure correctly is obligatory and one should not commit breach and take others' property by way of decreasing in the weight/measurement incorrectly and fraudulently."

9. "A man should be honest and straightforward in his daily matters, such as weighing out things, which he is selling and he should be straight, just and honest in all the dealings, not only with‑other people, but with himself, and in his obedience to Allah. Not may do either the one or the other when they have an opportunity of deceit. Justice is the central virtue and the avoidance of both excess and defect in conduct keeps the human world balanced just as the heavenly world is kept balanced by mathematical order. (Abdullah Yousaf Ali's Translation of the Holy Qur'an, p.1473 under Verse 55:8, 9).

10. The Holy Qur'an further says:

In order that ye may not transgress (due) balance. So establish weight with justice and fall not short in the balance. (Surah Al‑Rahman, 55:8,9).

11. The habit of niggardliness and stinging (Tatfif) has been severely cursed upon by the Almighty Allah in the Holy Quran "It is the spirit of injustice that is condemned‑‑‑giving too little and asking too much". (Abdullah Yousaf Ali's Translation).

12. The Holy Qur'an says:‑‑

(Woe to those that deal in fraud, those who when they have received by measure from men, exact full measure. But when they to give measure or weight to men, give less than due.) (Al‑Mutaffifin 83: 1‑3).

13. Besides the abovementioned verses of the Holy Qur'an there are, a number of Ahadith in which several important principles in relation to the fairness of the contracts and transactions have clearly and manifestly been laid down.

14 The Holy Prophet (p.b.u.h.) has elucidated the principle of mutual consent which has been enunciated in Verse of Surah Al‑Nisa (4:39) in several Ahadith. A few of them are reproduced as under:‑‑

(Mutual consent is the requirement of every contract for sale). (Sunan Ibn Maja, Vo1.2, p.73).

(Mutual consent is necessary in every transaction and option is provided after the completion of the transaction. It is not permissible to make any damage or to cause any harm to any Muslim). (Ibne Kaseer: Tafseer al‑Qur'an, Vol.1, p.479).

(The two (seller and purchaser) must not part away after making a deal except with mutual consent). (Sunan Abu Dawood, Vol.2, p.542 Egypt).

(No damage should be borne nor any should be caused). (Sunan Ibn Maja, Vo.2, p.784 Egypt. Al‑Muatta Imam Malik, Vol.2, p.745, Beirut. Musnad Imam Ahmad Bin Hambal, Vo1.5, p.327, Beirut).

15. To quote few more Ahadith on the subject, it is narrated from Hazrat Abbas ( R.A) that:‑‑

(This is first revelation after the arrival of the Holy Prophet (p.b.u.h.) to Madina. The people of Madina, at that time, were in the habit, that I when they have to purchase demand an exhaustive fulfilment but when they sell a thing to others give less in the measurement and weight. (After the revelation this Surah) till this time they are the most better people in the fulfilling of measure and weight). (Al‑Jame li Ahkam Al‑Qur'an Vol.19, p.250).

16. It is again narrated from Hazrat Abbas (R.A) that the Holy Prophet (p.b.u.h.) said that:‑‑

17. There is no people who renounce their pledges, except that Allah(s) gives their enemies authority over them and there are no people who give less in the measurement except that Allah(s) prevents the plants to grow and they are caught with famine. (Al.Sieuti: Al‑Dur‑Al‑Mansur, Vol.6, p.324).

18. The Sunnah of the Holy Prophet (p.b.u.h.) is so much exhaustive on the principles relating to contracts, transactions and pledges that no legal system of the world can claim to stand at par. Among these principles an illuminated one is that the sale contract should not consist upon anything which results in damage to any of the parties. In this regard it is narrated from Abu Harairah that:‑‑

(The Holy Prophet prohibited from a fraudulent sale). (Sahih Muslim Bi Sharh Al Nawawi, Vol.10, p.156 Sunan Abu Dawood, Vol.2, p.89, Al Jame al Tirmidi Vol.3, p.523. Al Muatta Imam Malik, Vo1.2, P.M. Sunan Ibn Maja, Vo1.2, p.739).

19. It has been narrated from Abdullah Bin Mas'ud that the Holy Prophet (p.b.u.h.) said:‑‑

(You should not purchase fish while it is in the water, because it bears risk and damage.) (Musnad Imam Ahmad Bin Hambal Vol.l p.388).

20. It is clear from the abovementioned Ahadith that the contract for sale should be free from every kind of risk, fraud and damage to any party. To achieve the purpose, it is likewise, necessary that the thing sold (Mabi ) and the price (thaman) thereof should very clearly and without any ambiguity be specified in the contract for sale. It may, therefore, be stated that the Muslim Jurists are unanimous on the point that the contract for sale should not be concluded with an ambiguous price; on the other hand it is necessary that the price of the thing sold, or agreed to be sold, should be clearly specified at the time of contract for sale.

21. Ibn Abidin referred to said condition in the following words:‑‑

(The thing sold, and the price thereof should be known to both the parties so that dispute may not occur) Ibn Abidin: Radd al‑Mukhtar, Vol.4, p.6 Wahbah Zuhaili)

Alfiqhal Islami wa Adillatuhu: Vol.4, p.379.

22. In the light of the above on the issue of fixation it may be concluded that the basic and fundamental date for fixation of the compensation for the land acquisitioned in the public interest, is the market value on the date of actual acquisition of land. A notification issued under section 4 only expresses an intention of the Government that it may or may not acquire the land. Furthermore, section 4 of the Act confers certain powers on the Government to enter on the land and survey which to some extent resembles the concept of Khiyar Ruyat the option of sight by the intended purchaser of the thing intended to be purchased, which may, perhaps be applicable in the matter of acquisition of land by the Government or other Authority. This cannot be said to be the date of actual acquisition, which is further denoted by ensuing provisions of the Act. That is to say, section 5 makes a provision for making claim by the owner, for damaging the property during survey etc., by virtue of section 4. Section 5‑A provides for filing objections against the desired acquisition of the land, and section 6 provides for disposal of those objections, one way or the other. If the objections are rejected further proceedings of acquisition are taken up which include the awarding of compensation, so much so that section 16 of the Act provides for taking possession of the land. We are, therefore, of the view that the date of the issue of the notification under section 4 is not crucial date but it is the date of actual acquisition which follows the step taken in the matter of acquisition after disposal of objections under section 6 of the Act, which is required to be substituted in section 23(1) of the Act.

23. It may be added that we do not find any repugnancy in the Qur'an and Sunnah for awarding 15% more on the market value of the land acquired as contemplated under section 23. The observation of one of us (Dr.Tanzil‑ur-Rahman, then a Judge of the High Court of Sindh) in the case reported as Carstairs & Cumming Ltd: v. Pakistan through the Secretary, Ministry of Defence (Navy), Rawalpindi 1985 CLC 2161 (DB), which seems to be appropriate, reads as under:‑‑

"32. We would here like to observe that compulsory acquisition of property is confiscatory in nature. As such the Courts, while awarding compensation should be liberal and moreso where the matter of requisition or acquisition of a commercial and industrial undertaking is involved, as it badly affects the future of the commercial/industrial concern. Sometime it may take good deal of time for its rehabilitation and restoration to its original position. The right of the State to acquire property of an individual is not absolute. It is of an exceptional nature and may in a sense be taken to directly interfere with the individual's ordinary right of volition regarding disposal of one's property, as pointed out by the Supreme Court in Province of West Pakistan v. Salimullah and others PLD 1966 SC 547 infra. Undoubtedly, the State may acquire private property in public interest, but the rightful (sic) private interest is also to be respected within permissible limits and particularly, while awarding compensation, the doctrines of `Adl' and `Ihsan, as propounded by Islam, it to be adhered to in an Islamic State. Since the field of the subject is occupied by statute, the Court may not have resort to the doctrine of Ihsan, but certainly it is bound to do `Adl', though within the framework of the statute, `Adl' as defined by classical Muslim jurists, is the placement of the thing at its place. In this case, our anxiety has been to see that the appellants be put in the same position, as far as possible, in which they would have been if there was no acquisition."

The above view is approved by us with the observation that this Court has the jurisdiction to introduce Islamic principles in a statute as contained in the injunctions of Islam e.g. in the matter of acquisition of land.

24. So far as the second point is concerned i.e. the delay in the payment of compensation, it is an established principle of Islamic Law that the delivery of the thing sold and payment of the price after the conclusion of the contract, is an obligation of the contracting parties.

25. The compensation of thing sold becomes a liability (Dain) on the part of purchaser, which is to be paid as early as possible, except deferment stipulated in the contract, by mutual consent of the parties.

26. It is narrated from Abu Umamah that the Holy Prophet (p.b.u.h.) said at the time of his sermon on the eve of `Hujjat al Wida':

(Any amount due on someone should be paid). (Al‑Jame li‑Tirmidi: 3, p.556. Sunan Abu Dawood: Vo1.2, p.112,. Beirut).

27. Allama Mubarkpuri in his commentary on Al‑Jame li‑Tirmidi explaining the Hadith said:

(It means that to pay the sum due (on some one) is obligatory). (Tuhfat al‑Ahwadi, Vol.4, p.481).

23. It is narrated that the Holy Prophet (p.b.u.h.) purchased a piece of land from Sahl and Suhail, who were orphans, and paid the price to them before the construction of the mosque. The boys asked the Holy Prophet (p.b.u.h.) to accept the land from them as a gift but the Holy Prophet (p.b.u.h.) did not agree to acquire the land without compensation:

(The Holy Prophet (p.b.u.h.) refused to accept the land as gift, instead of purchased it from them and then started the construction of the mosque). (Al‑Samhudi: Wafa al‑Wafa: Vol.l, p.322).

29. Narrated from Hadrat Anas, that the Holy Prophet (p.b.u.h.) sent for the people of Bani Najjar, and when they came to the Holy Prophet (p.b.u.h.), he asked them to tell the price of their land, which was needed for the construction of mosque. They said that they wanted their reward from Allah.

30. After the conclusion of the contract for sale, the seller is obliged to give delivery of the thing sold to the purchaser and the purchaser is required to pay its price/compensation.

(handing over of the two substitutes, is an obligation of both the two parties); (Wahbah Zuhban Al‑Fiqh al‑Islarni fi Saubihi al‑Jadeed, p.209).

31. Imam Abu Hanifah is of the opinion that the liability of purchaser of the payment‑ of the compensation should be fulfiled first. The purchaser will not be entitled to take possession of the thing purchased until he pays the price and the seller would have right to withhold the thing until he is paid the price of the thing except when the payment is deferred to a stipulated and specified time. For further reference‑material, the following quotations from three most authentic books of Fiqh may be of some help:

(Al‑Sarakhsi: Al‑Mabsut Vol.l3, p.192).

(Al‑Kasani: Al‑Bada'i`: Vo1.5, p.244).

(Ibn Abideen: Raddal Muhtar, Vo1.4, p.44).

(Extinction of the right of the seller over the thing sold is related to receipt of its total price. If the condition of sale is not fulfilled, the right of the seller of retention of the thing sold, remains intact until he does not receive total price, except when the payment of price is deferred to a future date). (Al‑Sarakhsi: Al‑Mabsut, Vol.13, p.192).

(According to Hanafi jurists, the right to retain the thing sold till the payment of the total amount of price applies in the case when the price is to be paid simultaneously. When the price is to be paid at a deferred point of a time, there shall be no right to retain the thing sold). (Al‑Kasani: Al‑Bada'i`: Vo1.5, p.244).

(The seller may retain the thing sold until total price of it is received by him, even if one dirham (out of the sale price) remains unpaid). (Ibn Abidecn: Raddal Muhtar, Vol.4, p.44).

32. It may be added that the right of unpaid seller to retain the property sold is also recognised under English Law.

33. In view of the above discussion, it is manifest that Islamic Injunctions as contained in the Holy Qur'an and Sunnah require the payment of price, which equally apply to compensation in case of compulsory acquisition, as soon as possible, and without any delay. But to provide for the payment of compensation at the rate of 15% per annum on account of delay in payment as held by this Court in its earlier decision dated 27‑3‑1984 cannot be endorsed by us. In our view, it amounts to Riba, for the reasons discussed in our detailed judgment on Riba reported as Dr. Mehmoodur Rahman Faisal v. Government of Pakistan (PLD 1992 FSC 1).

34. In this respect, it is also noticeable that the Government of Balochistan as well as the Government of Sindh by Act XIII of 1985 amended on 9‑10‑1985 and Sindh Ordinance XXIII of 1984 as amended on 30‑9‑1984 respectively, the Land Acquisition Act, 1894, in pursuance of the decision dated 27‑3‑1984 of this Court, a new section 28‑A was added which provided for additional compensation in the following words:‑‑

"28‑A. Additional compensation .‑‑In addition to the compensation fixed on the basis of market value as prevailing on the date of notification under section 4, an additional amount of fifteen per cent per annum of the compensation so fixed shall be paid from the date of‑ the notification under section 4 to the date of payment of the compensation."

We are afraid, the above provision in the Balochistan Act XIII of 1985, and Sindh Ordinance XXIII of 1984 is not sustainable in the light of the Injunctions of Islam as laid down in the Holy Qur'an and Sunnah of the Holy Prophet (p.b.u.h.) as discussed in the judgment on Riba, referred to above. Even otherwise, in view of the setting aside of this Court's judgment dated 27‑3‑1984 by the Shari'at Appellate Bench of the Supreme Court the earlier judgment of this Court does not hold the field and the view having not been adopted by us in our present judgment, Sindh Ordinance XXIII of 1984 and Balochistan Act XIII of 1985 call for their repeal, which also stand nullified by the judgment of the Supreme Court, referred to above.

35. We, therefore, direct the Provincial Governments of all the four Provinces, as .the law is included in the Provincial list of the Constitution that the amount of compensation is to be paid to the owner of the land or deposited in Civil Court in his name by the acquisitioning authority before taking over possession of land and a provision may be added to this effect after the existing section 16 of the Act which relates to taking of possession by the Government. This will protect the rights of both the parties under the principle of the Shari'ah:

36. To sum up, section 16 and section 23(1) of the Land Acquisition Act, 1894 will be amended suitably within a period of six months from the date of this judgment, as discussed above. In case the Government fails to do so, the above provisions will be deemed to have been amended on the expiry of six mouths period from the date hereof and the existing provision shall cease to be operative on and from 1st November, 1992.

37. The S.S.M.No.14 of 1983 is disposed of accordingly.

M.BA./684/FSC

Order accordingly.