The Supreme Court of Pakistan has ruled that governments must compensate landowners based on the actual market value of land acquired for public projects, declaring that official government rates alone cannot determine fair compensation.
In a landmark judgment, the apex court dismissed all civil appeals filed by the Khyber Pakhtunkhwa government in the Swabi land acquisition case, upholding earlier rulings by the Peshawar High Court and the Reference Court in favor of the affected landowners.
The detailed verdict, authored by Justice Muhammad Ali Mazhar, stated that compensation must reflect the true market value of the acquired property rather than relying solely on the Deputy Commissioner’s (DC) notified rates.
The court further ruled that authorities should also consider the future development potential of the land and its likely use when assessing compensation. It added that any increase in property values and the impact of inflation during delays in the acquisition process should also be factored into the final payment.
The Supreme Court emphasized that although the government has the legal authority to acquire private land for projects serving the public interest, it also has a constitutional duty to ensure landowners receive fair and adequate compensation.
Highlighting the principle of equitable compensation, the court observed that the standard should be “gold for gold, not copper,” underscoring that property owners must receive full financial justice when their land is acquired.
The case involved land acquired in Swabi for the construction of a canal project. The affected landowners challenged the compensation offered by the provincial government, arguing that it was significantly below prevailing market prices. The Reference Court revised the compensation based on available evidence and market rates, a decision that was subsequently upheld by the Peshawar High Court and has now been affirmed by the Supreme Court.
