Supreme Court Orders Govt to Pay Fair Market Price to Buy Plots

The Supreme Court of Pakistan has ruled that governments must pay landowners the actual market value of land acquired for public projects, declaring that compensation cannot be based solely on official government rates.

In a landmark judgment, the court dismissed all civil appeals filed by the Khyber Pakhtunkhwa government in the Swabi land acquisition case and upheld the earlier decisions of the Peshawar High Court and the Reference Court in favor of the affected landowners.

The detailed judgment, authored by Justice Muhammad Ali Mazhar, held that compensation for acquired land must reflect its true market value rather than relying only on the official Deputy Commissioner (DC) rate.

The court also ruled that authorities must consider the land’s future development potential and likely use when determining compensation. It further held that if there is a delay in acquiring the land, increases in property values and inflation should also be taken into account.

The Supreme Court emphasized that while the state has the authority to acquire private land for projects serving the public interest, it also has a constitutional obligation to provide fair and adequate compensation to affected citizens.

In one of the judgment’s key observations, the court stated that the principle for land compensation should be “gold for gold, not copper,” stressing that landowners must receive full financial justice when their property is acquired.

The case involved land acquired in Swabi for a canal project. Landowners challenged the compensation fixed by the provincial government, arguing that it was significantly below the market value. The Reference Court increased the compensation based on evidence and market rates, a decision later upheld by the Peshawar High Court before being affirmed by the Supreme Court.