LAND ACQUISITION COLLECTOR, NOWSHERA and others vs SARFARAZ KHAN

MUHAMMAD BASHIR JEHANGIRI, J.--The titled two direct appeals under section 54 of the Land Acquisition Act (No,I of 1894) (hereinafter called as the Act) seek to challenge the judgment of a learned Judge in Chambers of the Peshawar High Court, Peshawar, in affirmance of the order of the learned Senior Civil Judge, Nowshera, dated 22-1-1998, dismissing F.A.O. No,219 of 1998 filed by the Land Acquisition Collector and others and the cross-objections filed by the respondents.

2. The factual background of the case, as gleaned from the impugned judgment of the learned Single Judge of the Peshawar High Court, is that the land in Village Babi, Teshil and District Nowshera, was acquired by the Land Acquisition Collector, Nowshera, for the construction of "Pakistan Oil Depot" at the awarded amount. It is not any more in dispute that the enhanced amount had been paid to the respondents without any interest. The respondents somehow came to know that the payment of compound interest @ 8% per annum to the others had been made but not to them. They, therefore, instituted a suit on 18-6-1991 for a decree for mandatory injunction seeking direction to the appellants to distribute the compensation alongwith interest "strictly in accordance with law" which was decreed. The respondents then initiated execution proceedings in the same Court. The Executing Court while dealing with the interim relief observed that whether it was principal amount or interest, the Collector, Nowshera, was lawfully bound to act consistently in the payment of amount of compound interest @ 8% per annum. The other owners including the respondents filed an objection petition before the Executing Court which was dismissed on 24-4- 1994 with the direction to the Collector to distribute the amount of interest amongst the owners including the respondents herein according to their respective shares. The appeal filed by the respondents before the learned District Judge, too was dismissed. Nonetheless during the execution proceedings when the impugned order was passed on 22-1-1998, the respondents were also held entitled to the. Compound interest at 8% per annum as paid to the other owners from the date of possession till the actual payment and-then onward simple interest@ 6% per annum "till the account is closed by the actual payment". This order of the Executing Court was challenged by the Land Acquisition Collector and another in F.A.O. No,212 of 1998 before the learned Peshawar High Court. The respondents also filed cross-objections for enhancement of the compound interest @ 8% per annum throughout. By a single order, the learned Judge in Chambers of the High Court dismissed not only appeal but also the cross-objections on the ground that the appeal before him was barred by time.

3. Feeling aggrieved, the Land Acquisition Collector, Nowshera, and another filed Civil Appeal No,1393 of 1999 while the respondents, the land owners, filed appeal against the dismissal of their cross-objections by way of Civil Appeal No,1496 of 1999. Since the F.A.O. And the cross-objections have been disposed of through the impugned common judgment, we also propose to decide them by this single judgment.

4. Mr. Muhammad Yunis Khan Tanoli, learned Advocate-General, N.-W.F.P., submitted that at the outset the proposition to be addressed by this Court was whether the plea of limitation could operate as a bar in the factual background of this case when the impugned order was without jurisdiction; that the department was not a party to Civil Suit No,149 of 1991 which was not an objection petition under section 18 of the Act before the learned Referee Judge. In this context, it was contended that if a decree or an order is passed in a suit in utter contravention of the mandatory provisions of law, such order would be a nullity against which no limitation shall run. In this connection reliance was placed on the judgments of this Court in the cases of: (1) Mst. Rehmat Bibi and others v. Punnu Khan and others 1986 SCM R 962; Malik Khawaja Muhammad and 24 others v. Marduman Babar Kahol and 29 others 1987 SCM R 1543 and Muhammad Shafl v. Mushtaque Ahmed through Legal Heirs and others 1996 SCM R 856.

5. Dr. Muhammad Jehangir Khan, son of respondent No,1 has very ably attempted to defend the impugned order of the learned Single Judge and pointed out that Maj.-Gen. (Retd.) Naseerullah Khan Babar and another whose land had also been acquired under the same award for the same purpose had been paid compound interest @ 8% per annum and, therefore, if the respondents were held entitled to simple interest @ 6% per annum, it would be a sheer discrimination violating the Constitutional mandate enshrined in the Chapter of the Fundamental Rights thereof.

6.The learned Single Judge appears to have been convinced that the learned Executing Court had erred to award compound interest @ 8% per annum with effect from the date of taking over the possession of the acquired land until the enhanced amount has been so paid or deposited in Court. Nonetheless the learned Judge in Chambers of the Peshawar High Court has, however, fallen into error to grant the compound interest @ 8% per annum as paid to the other owners from the date of possession till the actual payment and then onward simple interest @ 6% per annum "till account is closed by actual payment". Section 34 of the Act had been substituted by the N.-W.F.P.

Ordinance V of 1983 whereunder it had been provided that when the amount of compensation is not paid to the objectors-owners or deposited in Court before taking possession of the land, the Collector shall pay the amount awarded with simple interest thereon @ 6% per annum from the time of so taking over possession until it shall have been so paid to the objectors or deposited in Court. Obviously the impugned order covering the grant of 8% per annum compound interest, was in contravention of the mandatory provisions of N.-W.F.P. Ordinance V of 1983 which was accordingly a nullity against which no limitation would run. The three precedents of Mst. Rehmat Bibi, Malik Khawaja Muhammad and Muhammad Shafi (supra) relied upon by the appellants supported the principle which was passed into service by the learned Adovcate-General, N.-W.F.P.

The learned Judge in Chambers of the Peshawar High Court appears to have overlooked difference between void orders and the erroneous orders. It is settled law that the bar of limitation would not operate in respect of void orders but not in respect of erroneous orders. The question of limitation may not, therefore, arise in respect of a judgment which is a nullity in law, void or ultra vires the statute or the constitution. In point of fact, if an order is without jurisdiction and void, it need not even be formally set aside as has been held in the cases of Ali Muhammad v. Hussain Bakhsh PLD 1976 SC 37 and Ch. Altaf Hussain and others v. The Chief Settlement Commissioner PLD 1965 SC 68.

7. It would thus be noticed that the impugned order of grant of compound interest at the specified rate was in clear violation of the N.-W.F.P. Ordinance V of 1983, therefore, it was a nullity in law and would not be hit by any bar of limitation.

8. For the foregoing reasons, the impugned order of award of compound interest @ 8% per annum to the respondents-owners is set aside and is substituted with the order of award of simple interest @ 6% per annum from the date of taking over possession of the land until the amount has been so paid to the respondents or deposited in the Court.

9. Civil Appeal No,1494 of 1999 has no substance which is dismissed.

10. The orders arising out of F.A.O. Or cross-objections were not relatable to any orders under the Act. Conversely the impugned orders had arisen out of an execution petition. Civil Appeal No,1393 of 1999 is, therefore, converted into C.P.L.A. And then re-converted into appeal, is accepted and in consequence the impugned judgment of the learned Judge of the. High Court is set aside in the above terms. The parties shall, however bear their own costs.