IN THE SUPREME COURT OF PAKISTAN 
(Appellate Jurisdiction) 
 
 
Present: 
Mr. Justice Nasir-ul-Mulk, CJ 
Mr. Justice Gulzar Ahmed 
Mr. Justice Mushir Alam 
 
 
C.As.No.1011 & 2786 of 2006 
AND 
Civil Petition No.538 of 2006  
[On appeal against a common Judgment dated 
31.05.2006 passed by the Lahore High Court, Multan 
Bench, in ICA No.229 of 1999 & RFA No.328 of 2001] 
 
 
 
Mst. Nasreen Zahra 
(in CA.1011) 
Government of the Punjab through Secretary 
Communication & Works Department, Lahore 
(in CA.2786) 
Appellant(s) 
Mst. Nasreen Zahra 
(in CP.538) 
Petitioner(s) 
VERSUS 
Multan Development Authority Multan & another 
(in CA.1011) 
Mst. Nasreen Zahra wife of Javed Haider Gardezi 
(in CA.2786) 
Assistant Commissioner (C) Land Acquisition 
Collector City Sub Division Multan & 6 others 
(in CP.538) 
Respondent(s) 
 
 
 
For the Appellant(s) 
 
 
[in CA.1011 & CP.538] 
: Syed Najam-ul-Hassan Kazmi, Sr. ASC 
Mr. Muhammad Ali Shah Gillani, ASC 
 
 
 
[in CA.2786] 
: Mr. Razzaq A. Mirza, Addl.A.G.Punjab 
(also on Court’s Notice in CP.538 & CA.1011) 
 
 
 
For the Respondent(s) 
 
 
[R.1 in CA.1011] 
: Mr. Anwar Kamal, Sr. ASC 
 
[R.2 in CA.1011] 
: Ex-parte 
 
[R.1 in CA.2786] 
: Syed Najam-ul-Hassan Kazmi, Sr. ASC 
Mr. Muhammad Ali Shah Gillani, ASC 
 
[R.2 in CA.2786] 
: Mr. Anwar Kamal, Sr. ASC 
 
[R.7 in CP.538] 
: -do- 
 
 
 
Date of Hearing 
: 29.01.2015 
 
 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 2 - 
 
 
 
JUDGMENT 
GULZAR AHMED, J.— Civil Appeal No.1011 of 2006 and Civil 
Petition No.538 of 2006 have been filed by Mst. Nasreen Zahra while 
Civil Appeal No.2786 of 2006 is filed by Government of the Punjab 
through Secretary Communication & Works Department, Lahore.  
There is a common impugned judgment dated 31.05.2006 of a learned 
Division Bench of the Lahore High Court, Multan Bench. 
2. 
 
Brief facts of the matter are that a Notification dated 
07.05.1976 was issued under Section 4 of the Land Acquisition Act, 
1894 (the Act) by the Collector/Deputy Commissioner, Multan District, 
Multan, which was published on 10.12.1976 notifying the acquiring of 
certain lands by Government of the Punjab at the public expense for 
the public interest i.e. construction of Multan Bye-Pass.  A 
Corrigendum Notification dated 18.03.1977 was issued whereby the 
land of Mst. Nasreen Zahra was included in the project of construction 
of Multan Bye-Pass.  Another Notification dated 21.01.1980 was issued 
under Section 4(1) of the Punjab Acquisition of Land (Housing) Act, 
1973 read with Chapter VI of the Punjab Development of Cities Act, 
1976 by the Deputy Commissioner, Multan, notifying that the land 
specified in the Notification is needed by the Multan Development 
Authority (MDA) at its expense for the construction of Multan Bye-
Pass Phase-II, which shall be deemed to be a Housing Scheme under 
Section 25 of the Punjab Development of Cities Act, 1976.  Mst. 
Nasreen Zahra challenged this Notification dated 21.01.1980 by filing 
Writ Petition No.7932 of 1980, which was allowed vide judgment dated 
23.12.1990.  Against this judgment, MDA filed ICA No.12 of 1991 
which through judgment dated 18.03.1992 was dismissed.  The 
judgment of ICA was challenged by the MDA before this Court in Civil 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 3 - 
 
 
 
Appeal No.492 of 1993, which was dismissed vide judgment dated 
26.05.1998 with direction to the Land Acquisition Collector, Multan 
(LAC) to deliver the Award allowing compensation under the Land 
Acquisition Act, 1894 and also determine the Authority who will pay 
the compensation.  The Award dated 26.08.1998 was announced and 
Mst. Nasreen Zahra was awarded compensation of her land @ 
Rs.20,000/- per marla with 15% compulsory acquisition charges and 
the acquiring agency namely MDA was directed to deposit the amount 
of compensation.  The Award was reviewed by the LAC through his 
further order dated 04.10.1998 whereby the rate of acquisition was 
reduced from Rs.20,000/- per marla to that of Rs.10,000/- per marla.  
Mst. Nasreen Zahra, being aggrieved, challenged the order of review 
dated 04.10.1998 by filing Writ Petition No.11480 of 1998 while the 
MDA also filed Writ Petition No.1439 of 1999 challenging the Award 
dated 26.08.1998 and its review dated 04.10.1998.  Both these Writ 
Petitions were decided vide judgment dated 25.10.1999 whereby the 
order of review dated 04.10.1998 was declared illegal while the Award 
dated 26.08.1998 was upheld.  Writ Petition of Mst. Nasreen Zahra 
was thus allowed and that of the MDA was dismissed.  MDA filed ICA 
No.229 of 1999 which was dismissed vide judgment dated 08.10.2001, 
against which the MDA filed C.P.No.3857-L of 2001 in this Court.  In 
the meanwhile Mst. Nasreen Zahra had filed Reference under Section 
18 of the Act with the Referee Court for enhancement of 
compensation, which was dismissed vide judgment dated 30.07.2001.  
Against this judgment of Referee Court, Mst. Nasreen Zahra filed RFA 
No.328 of 2001.  The MDA also field RFA No.366 of 2001 against this 
judgment.  The C.P.No.3857-L of 2001 was disposed of by this Court 
vide order dated 07.07.2004 by consent of the parties’ counsel 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 4 - 
 
 
 
whereby the ICA No.229 of 1999 was remanded to the Lahore High 
Court, Multan Bench for decision along with the two RFAs.  By the 
impugned judgment dated 31.05.2006 the learned Division Bench of 
the Lahore High Court, Multan Bench partly allowed ICA No.229 of 
1999 to the extent that it is the Punjab Government and not the MDA 
who has to pay the compensation.  The RFA No.366 of 2001 filed by 
the MDA was found to be not maintainable and dismissed while the 
RFA No.328 of 2001 filed by Mst. Nasreen Zahra was not pressed for 
enhancement of compensation instead only the claim under Section 34 
of the Act was pressed, which the Court did not allow and therefore 
dismissed the said RFA.  Mst. Nasreen Zahra filed C.A.No.1011 of 2006 
and C.P.No.538 of 2006 while Government of the Punjab has filed 
C.A.No.2786 of 2006 in this Court. 
3. 
 
Syed 
Najam-ul-Hassan 
Kazmi, 
learned 
Senior 
ASC 
appearing for the appellant/petitioner Mst. Nasreen Zahra has taken us 
through the record of the case and has contended that Mst. Nasreen 
Zahra is entitled for payment of interest in that no compensation was 
deposited in Court nor was it paid to her.  He contended that under 
Section 31 of the Act, it was the responsibility of the Collector to 
tender the payment of compensation awarded by him to Mst. Nasreen 
Zahra and that at no time she has refused to receive the 
compensation.  The learned Senior ASC contended that where such 
default is made, the Collector becomes liable to pay interest in terms 
of Section 34 of the Act.  In support of his arguments, the learned 
Senior ASC has relied upon the case of Hissar Improvement Trust V. 
Smt. Rukmani Devi & another [AIR 1990 SC 2033]; Mangat Ram 
Tanwar & another V. Union of India [AIR 1991 SC 1080]; and 
Imamuddin Shah through Attorney V. Deputy District Officer 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 5 - 
 
 
 
(Revenue) and Land Acquisition Collector Sanghar & another [2005 
MLD 69 Karachi]. 
4. 
 
Mr. Razzaq A. Mirza, learned Additional Advocate General, 
Punjab, appearing for Government of the Punjab has contended that 
there were in all 108 effected parties whose land was acquired by the 
MDA out of whom 107 effected parties have received compensation 
without any protest.  Only Mst. Nasreen Zahra did not receive the 
compensation.  He further contended that Government of the Punjab 
was not a party in the proceedings before this Court; therefore, it was 
not heard and that the Reference was filed against the MDA and it was 
the MDA who filed appeal against the judgment given in the Reference.  
He further contended that the first Award given by the LAC was @ 
Rs.20,000/- per acre which comes to Rs.153/- per marla while in the 
present case the Award is given @ Rs.20,000/- per marla, which is 
challenged by Government of the Punjab.  He contended that though 
the project for which the land was acquired was funded by the Federal 
Government but the Federal Government has assigned the project to 
the Provincial Government of the Punjab and MDA was its executing 
agency.  He contended that Government of the Punjab had no 
opportunity to contest the Award announced in favour of Mst. Nasreen 
Zahra. 
5. 
 
We will first of all deal with the contentions of the learned 
Additional Advocate General, Punjab because they are in the nature of 
preliminary objections.  The learned Additional Advocate General has 
raised the objection that Government of the Punjab was not heard in 
the determination of compensation of the land acquired from Mst. 
Nasreen Zahra and that its challenge to the award of compensation be 
accepted now by this Court.  We may note that Mst. Nasreen Zahra 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 6 - 
 
 
 
had filed her claim for awarding compensation before the LAC through 
her petition dated 30.06.1998 in which respondent No.1 was the 
Province of Punjab.  Yet again we note that in Writ Petition No.7932 of 
1980 filed by Mst. Nasreen Zahra, Government of the Punjab was a 
party where it was represented by its Additional Advocate General, as 
is apparent from the judgment dated 23.12.1990.  Against this 
judgement, MDA filed C.A.No.492 of 1993 in this Court in which too 
Government of the Punjab was a party but as it appears it did not 
make appearance in the said Civil Appeal.  In the second round of 
litigation before this Court, the MDA also filed C.P.No.3857-L of 2001, 
in which Government of the Punjab was a party.  In the RFA No.328 of 
2001 filed by Mst. Nasreen Zahra, Government of the Punjab was not 
impleaded as a party but in the RFA No.366 of 2001 filed by the MDA, 
Government of the Punjab was very much a party.  At the time of 
hearing of the two RFAs so also ICA No.229 of 1999, Government of 
the Punjab was very much represented through its learned Assistant 
Advocate General namely Mr. Muhammad Qasim Khan and this is 
reflected from the impugned judgment.  In the face of so many 
proceedings in which Government of the Punjab was a party, it is hard 
to imagine as to how Government of the Punjab could be considered to 
have remained unheard in the matter of determination of the 
compensation to Mst. Nasreen Zahra.  In the three proceedings in 
which the impugned judgment was announced by the High Court, at 
least in two of them Government of the Punjab was directly a party, 
and those proceedings contained all material facts relating to acquiring 
of land from Mst. Nasreen Zahra for construction of Multan Bye-Pass 
and in the determination of compensation and giving of Award by the 
Collector.  Government of the Punjab had an opportunity of raising this 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 7 - 
 
 
 
objection that it has not been heard in the proceedings of 
determination of compensation but no such objection seems to have 
been raised by Government of the Punjab before the High Court.  In 
any case, it became aware of the fact of acquiring of land of Mst. 
Nasreen Zahra when initial Writ Petition No.7932 of 1980 was filed by 
her and the culmination of such proceedings into an Award when RFA 
of MDA was served upon it.  No steps were taken by Government of 
the Punjab to ensure its representation at the stage of determination 
of compensation before the Collector or before the Referee Court.  It, 
however, was represented in the two RFAs which arose from judgment 
of the Referee Court.  Thus, we find no substance in this objection of 
the learned Additional Advocate General, Punjab.  As regard the next 
submission of the learned Additional Advocate General that there were 
108 effectees of whom 107 have been paid compensation and only 
Mst. Nasreen Zahra has not received the compensation.  Though such 
submission was made by the learned Additional Advocate General but 
he did not point out from record as to who were those 107 effectees to 
whom compensation was paid and if paid at what rate and on the basis 
of which Award and of what date, as the proceedings for acquiring of 
land for construction of Multan Bye-Pass were initiated as early as on 
07.05.1976 when the first Notification under Section 4 of the Act was 
issued.  The Award in the case of Mst. Nasreen Zahra was made by the 
Collector on 26.08.1998 by which Mst. Nasreen Zahra was allowed 
compensation @ Rs.20,000/- per marla and it was not shown to us 
from the record that such compensation, after the Award, was 
tendered to Mst. Nasreen Zahra and that she refused to receive the 
same.  What this argument of the learned Additional Advocate General 
reflects is that there was no cavil to the compensation awarded to Mst. 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 8 - 
 
 
 
Nasreen Zahra but the grievance was that she did not receive the 
same while the other effectees have received their compensation.  As 
regards the submission of the learned Additional Advocate General 
that the first Award given by the LAC was @ Rs.20,000/- per acre 
which comes to Rs.153/- per marla while in the present case the 
Award is given @ Rs.20,000/- per marla and the latter Award is 
claimed to be challenged by Government of the Punjab before this 
Court.  The Award in this case was made by the Collector as back as 
on 26.08.1998 and it could not be directly challenged by Government 
of the Punjab before this Court by filing C.A.No.2786 of 2006.  
However, we have looked into the record to ascertain the factum on 
the basis of which this argument of the learned Additional Advocate 
General is based and have found a copy of an Additional Award of the 
Collector, Land Acquisition, MDA, Multan, dated 02.10.1980 in respect 
of land in villages Ravi Mari Seatal and Kotla Muhammad Baqa for 
Multan Bye-Pass Phase-II.  This Additional Award is available at page 
226 of CMA No.1831 of 2006 filed by the learned Senior ASC for Mst. 
Nasreen Zahra.  This Award was made under the Punjab Acquisition of 
Land (Housing) Act, 1973, where it was noted that average sale price 
for two years prior to acquisition proceedings supplied by the 
Tehsildar, Multan, was Rs.91,318/40 P.A., whereas the maximum 
compensation prescribed by the Act was Rs.20,000/- per acre and the 
latter amount was awarded as compensation.  It has already been 
noted above, that application of Punjab Acquisition of Land (Housing) 
Act, 1973 for acquiring of land of Mst. Nasreen Zahra for Multan Bye-
Pass was declared to be illegal by this Court vide its judgment dated 
26.05.1998 and directions were given for computation of the Award 
according to the Land Acquisition Act.  In the face of the judgment of 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 9 - 
 
 
 
this Court being in the field we cannot at all look into this argument of 
the learned Additional Advocate General as the same is not tenable.  
In any case, there is nothing on record to show that compensation 
allowed by the Additional Award dated 02.10.1980 @ Rs.20,000/- per 
acre was accepted by any of the effectees whose land was acquired for 
the construction of Multan Bye-Pass.  As regards the liability of 
Government of the Punjab for payment of compensation for the land 
acquired for construction of Multan Bye-Pass, the very first Notification 
dated 07.05.1976 issued under Section 4 of the Act shows that the 
land was acquired by Government of the Punjab for public purpose i.e. 
construction of Multan Bye-Pass.  Through a Corrigendum Notification 
dated 18.03.1977, the land of Mst. Nasreen Zahra was included in the 
project i.e. construction of Multan Bye-Pass.  The beneficiary of land in 
terms of the above Notification is Government of the Punjab and this 
fact alone is sufficient to establish its liability for payment of 
compensation for the land acquired.   
6. 
 
We now take up the issue of payment of interest, as 
claimed by Mst. Nasreen Zahra in her petition dated 30.06.2006 filed 
before the Collector and in the Reference application also such claim 
was made by her.  In RFA No.328 of 2001 this was the only claim 
pressed by Mst. Nasreen Zahra.  The relevant provisions that deal with 
payment of compensation in the Act is Section 31 (1) & (2) which read 
as follows :- 
 
“Sec.31.  Payment of compensation or deposit of 
sum in the Court.--(1) On making an award under 
Section 11, the Collector shall tender payment of the 
compensation awarded by him to the persons interested 
entitled thereto according to the award, and shall pay it to 
them unless prevented by some one or more of the 
contingencies mentioned in the next sub-section. 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 10 - 
 
 
 
(2) 
If they shall not consent to receive it, or if there be 
no person competent to alienate the land, or if there be 
any dispute as to the title to receive the compensation or 
as to the apportionment of it, the Collector shall deposit 
the amount of the compensation in the Court to which a 
reference under Sec.18 would be submitted”. 
 
Section 34 of the Act deals with the payment of interest and it reads 
as follows :-  
 
“Sec.34.  Payment of interest.--When the amount of 
such compensation is not paid or deposited on or before 
taking possession of the land, the Collector shall pay the 
amount awarded with interest thereon at the rate of six 
per centum per annum from the time of so taking 
possession until it shall have been so paid or deposited”. 
 
7. 
 
It is clear from reading of the provisions of Section 31 that 
on making of Award under Section 11 of the Act, the Collector is bound 
to tender the payment of compensation awarded by him to the person 
entitled thereto according to the Award.  In case the Collector is 
prevented from tendering compensation awarded by him, the Collector 
is required to deposit the compensation in the Court to which 
Reference under Section 18 of the Act is made.  The compliance of the 
provision of Section 31 of the Act by the Collector is mandatory for the 
simple reason that its non-compliance give rise to penal consequences 
and such penal consequences are those as are provided in Section 34 
of the Act i.e. interest prescribed therein will become payable.   
8. 
 
Syed Najam-ul-Hassan Kazmi, learned Senior ASC for Mst. 
Nasreen Zahra has emphatically contended before us that neither the 
compensation awarded by the Collector to Mst. Nasreen Zahra was 
tendered to her nor was it deposited in the Referee Court where 
Reference was filed by Mst. Nasreen Zahra.  The learned Additional 
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 11 - 
 
 
 
Advocate General was unable to show us that on making of the Award, 
the Collector in fact tendered/offered compensation awarded by him to 
Mst. Nasreen Zahra.  Further we also note that the learned Additional 
Advocate General did not point out to us that the compensation 
awarded by the Collector was deposited in the Court where Mst. 
Nasreen Zahra has filed Reference under Section 18 of the Act.  The 
payment of interest as provided in Section 34 of the Act is mandatory 
and it has been so held by this Court in the case of Collector of Land 
Acquisition, Nowshera V. Fazal Rahim & 3 others [1984 SCMR 1043].  
Therefore, in the absence of any proof that compensation amount 
awarded by the Collector was tendered to Mst. Nasreen Zahra or was 
deposited with the Referee Court, in our view, will establish the claim 
for payment of interest, as provided under Section 34 of the Act.  We 
may note that in the impugned judgment, the High Court while 
disallowing the claim for payment of interest to Mst. Nasreen Zahra 
assigned the reason that the Provincial Government has released 
Rs.10 Million to the MDA for compensation.  This reason from reading 
of the provisions of Section 31 and 34 of the Act becomes altogether 
irrelevant in that the mandatory requirement of law is that the 
compensation amount awarded by the Collector was required to be 
tendered to Mst. Nasreen Zahra and in case the Collector was 
prevented from tendering the compensation amount to Mst. Nasreen 
Zahra, he was required to deposit the same in the Referee Court 
where Reference under Section 18 of the Act was field by Mst. Nasreen 
Zahra.  This having not been done, we are of the view that Mst. 
Nasreen Zahra is entitled to payment of interest, as provided under 
Section 34 of the Act.   
C.As.No.1011 & 2786 of 2006 & C.P.No.538 of 2006 
- 12 - 
 
 
 
9. 
 
We, therefore, allow Civil Appeal No.1011 of 2006 to the 
extent as noted above and dismiss Civil Appeal No.2786 of 2006.  Civil 
Petition No.538 of 2006 is converted into an appeal and is also allowed 
in the above terms. 
 
 
 
 
 
 
 
CJ. 
 
 
 
 
Bench-I 
ISLAMABAD 
J. 
 
APPROVED FOR REPORTING 
*Hashmi* 
J. 
 
 
 
Announced in open Court on   
07.07.2015  
 
 
 
 
 
 
 
J.