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The CDA Ordinance 1960 and Land Acquisition Act 1894 do not permit Non-Monetary Compensation for Acquired Land --- Subsidiary Legislation could not override the Requirements of the Parent Statute --- Islamabad High Court, Islamabad

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Islamabad 06-11-2024: In a recent landmark ruling, the Islamabad High Court (IHC) clarified key principles regarding compensation for land acquisition, rejecting the Capital Development Authority’s (CDA) historical practice of providing plots in lieu of monetary compensation. The case, Azhar Hussain Shah and others Vs. Capital Development Authority (CDA), stemmed from a dispute over compensation for Built-Up Properties (BUPs) acquired by CDA for Islamabad’s development.

The petitioners, including descendants of local residents whose land was acquired in the 1960s, sought compensation in the form of residential plots, claiming promises from CDA officials during acquisition negotiations. They cited several compensation awards and CDA policies, including the Rehabilitation Policies of 1984 and 1996, which they argued supported plot allotments instead of cash. The petitioners pointed to the agency’s long-standing practice of allotting plots to affected individuals as grounds for “legitimate expectation.”

The Islamabad High Court (IHC), however, upheld the legal framework established under the Constitution (Article 24) and CDA Ordinance, 1960, which mandates that compensation for compulsory land acquisition must be monetary. The Court emphasized that the CDA Ordinance and Land Acquisition Act, 1894 do not permit non-monetary compensation for acquired land. The Court ruled that CDA’s previous practices of plot allotments were not legally binding and stated that “there is no estoppel against law,” rejecting petitioners’ claims based on past practices.

The Court found several provisions within CDA’s Rehabilitation Policies (1984, 1996, and 2023) to be ultra vires, or beyond the legal authority granted by the CDA Ordinance. These policies, which allowed plot allotments as compensation, conflicted with the Ordinance’s stipulation for monetary compensation only. The Court reiterated that subsidiary legislation could not override the requirements of the parent statute, establishing a clear boundary on CDA’s authority in land compensation matters.

In line with settled case law, the Court also reinforced the “one award principle,” requiring a single, consolidated compensation award to cover all interests associated with acquired land, including buildings and crops. This principle, the Court noted, prevents CDA from issuing separate awards for land and BUP compensation, a practice the agency had followed.

Additionally, the Court dismissed the petitioners’ claims for a plot allotment “package deal” made during informal negotiations, citing the [Suo Moto Case No.13 of 2009] (MPCHS case), which bars CDA from entering into private agreements that conflict with statutory provisions.

While rejecting the plot claims, the Court did grant petitioners additional monetary compensation at an 8% annual rate under Section 32A of the CDA Ordinance, to account for delays from the time of possession transfer to final compensation payment.