LAHORE: In a significant development, the landowners have got adjusted compensation for land acquired for public purpose.
Initially, the compensation was increased from Rs95,000 to Rs120,000 per acre which was challenged by the land owners. They maintained that compensation should consider market and potential value. They further contended that the relevant company didn’t inflate property value prior to leasing and usage, and the compulsory charges were reduced from 25% to 15% of market value. Also, no additional compensation was made due to legislative changes.
The company, on the other hand? maintained that the application of the capitalization method for land valuation should involve an appropriate multiplier, typically not exceeding annual rental value of ten years, also that the land has been acquired for a public purpose, as stated in the notifications. Therefore, the appellant is liable to pay 15% and not 25% of the market value of the acquired property, as compulsory charges. The company was also of the view that it is entitled to refund or adjustment of the rents paid to the landowners from the date of the notification issued till the date of the Award.
The relevant forum pointed out that main thrust of the company challenging the criteria for determination of compensation to be awarded for acquisition of the acquired-property was that the same could not be hinged on a 20-yea? multiplier of the
annual rent paid for the acquired-property.
While contesting the validity of such a long period, the company proposed 10-year multiplier of the annual rent paid for the acquired-property. But the forum noted that the company itself leased and used the acquired-property before it was acquired. Since the company negotiated and set the rent, the possibility for manipulation of the potential value of the demised property would be minimal. Furthermore, the time period that had lapsed between the issuance of acquisition notification and the passing of the Award in respect of the acquired-property that was already leased by the appellant-company does not render the amount of compensation adjudged to be unreasonable.
Even otherwise, it is by now settled that the compensation for the property being acquired must not only be based on its market value but also the potential value thereof. Therefore, it declared that compensation should consider market and potential value.
Copyright Business Recorder, 2024
Comments
Comments are closed.