The Supreme Court of Pakistan has declared that while the state has the constitutional authority to acquire private land for public interest projects, it must ensure affected landowners receive full, fair, and realistic compensation. In a detailed 20-page judgment authored by Justice Muhammad Ali Mazhar in the Swabi land compensation case, the apex court held that compensation cannot be determined solely based on government-notified rates.
Key Principles of Compensation
The court directed that authorities must also consider the land's prevailing market value, its future potential, and development prospects when assessing compensation. The judgment further stated that if there is a delay in the land acquisition process, any increase in land prices and the impact of inflation during that period must also be reflected in the compensation awarded.
Gold for Gold Principle
Emphasising the principle of complete financial justice, the Supreme Court observed that compensation should follow the principle of 'gold for gold, not copper,' ensuring landowners receive equivalent value for the property they lose. The case related to land acquired for a canal project in Swabi, where landowners challenged the government's compensation package as being significantly below the actual value of their property.
Legal Proceedings and Outcome
A Reference Court enhanced the compensation after reviewing the evidence, a decision later upheld by the Peshawar High Court. The Khyber Pakhtunkhwa government challenged the enhanced compensation before the Supreme Court, but the apex court dismissed all civil appeals, affirming the rulings of the lower courts.
Constitutional Right to Fair Compensation
The Supreme Court reiterated that fair compensation is a constitutional right and held that whenever the state acquires private property for public purposes, compensation must reflect the land's genuine market value, future potential, and any appreciation in value caused by delays in the acquisition process.
