LAHORE: In a major development, land owners have been given adjusted compensation for land acquired for public purposes.

Initially, the compensation was increased from Rs95,000 to Rs120,000 per acre, which was challenged by the landowners. They insisted that compensation should take into account market and potential value. They further argued that the relevant company had not increased the value of the property before rental and use, and that the mandatory charges were reduced from 25% to 15% of the market value. There has also been no additional compensation as a result of changes in the law.

The company, on the other hand? continued to maintain that the application of the capitalization method for land valuation should include an appropriate multiplier, which generally does not exceed the annual rental value of ten years, and that the land has been acquired for a public purpose as stated in the notifications. The appellant therefore owes 15% and not 25% of the market value of the acquired property as mandatory charges. The company also held that it is entitled to reimbursement or adjustment of the rents paid to the landowners from the date of the notice to the date of the judgment.

The relevant forum pointed out that the main thrust of the company challenging the criteria for determining the compensation to be awarded for the acquisition of the acquired property was that the same could not be subject to a term of twenty years. multiplier of the

annual rent paid for the acquired property.

Although the company disputed the validity of such a long period, the company proposed a ten-year multiplier of the annual rent paid for the acquired property. But the forum noted that the company itself rented and used the acquired property before acquiring it. Because the company negotiated and fixed the rent, the opportunity for manipulation of the potential value of the destroyed property would be minimal. Moreover, the period that has elapsed between the issuance of the notice of takeover and the pronouncement of the judgment with regard to the acquired property that was already rented out by the appellant company does not mean that the amount of the compensation is considered unreasonable.

Even otherwise, it is now established that the compensation for the property to be acquired must be based not only on its market value, but also on its potential value. Therefore, she stated that compensation should take into account market value and potential value.

Copyright Businessrecorder, 2024