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Gatwala Commercial Hub , Faisalabad is Punjab’s biggest and Pakistan’s second largest mixed use, real estate project. It has a covered area of over 3.1 million sq. ft.

This mega project, designed and developed by Shah Nawaz Associates, is located, at the junction of Canal Expressway and Lahore Sheikhupura Road. The road in front of the GCH project, has an average traffic count of 30 vehicles per minute. become, the city’s next mega center for trade, commerce, industries as well as residential projects.

 

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Right of Compulsory Acquisition of Private Property; A Critical Analysis

Introduction

Compulsory acquisition is defined as the government’s prerogative to acquire private land for the benefit of the public legitimately. This type of acquisition is termed ’eminent domain’ in countries like Pakistan and the USA; ‘compulsory purchase’ in the United Kingdom, Ireland, and New Zealand; ‘expropriation’ in Canada and South Africa; and ‘resumption’ in Australia. Even though the concept is much older, the idea of eminent domain was formally coined by the prominent Dutch jurist, Hugo Grotius, in his book De Jure Belli ac Pacis (1625), as the Latin phrase ‘dominium eminent (Grotius, 1Grotiushe doctrine of eminent domain has evolved various jurisdictions across the world. In Pakistan, ‘The Land Acquisition Act, 1894′ is the primary law regulating eminent domain, a relic of colonial rule. Most of the interpretation relies upon case law developed over time. Even though the utilisation of this right in furtherance of public interest and welfare has its own sets of benefits; however, the loopholes present in the law have been exploited to the detriment of common public and private landowners at large.

This research article by the Iqbal Institute of Policy Studies will discuss the law of eminent domain, the exploitation of this law for the development of housing societies, and the consequences of the changes in the law of eminent domain in Pakistan.

 

Evolution of The Law of Eminent Domain

The law of eminent domain has evolved across the world. In the USA, the debate on eminent domain started with the landmark judgment, Kohl v United States, where the court set the criteria of “just compensation” for the acquisition of land by the Federal Government. Subsequently, the ‘Takings Clause’ was included in the Constitution of the United States through the Fifth Amendment, which imposed two requirements on the government to be able to exercise the right of eminent domain: ‘just compensation’ and ‘public use’ (Kohl v United States, 1875).

In Pakistan, eminent domain law has colonial origins and its history of exploitation, which can be traced back to the ‘Bengal Regulation I of 1824’. The principal objective of this law was to enable the officers of East India Company to acquire private property for infrastructure development with fair compensation. This law changed over time in 1850, 1863, 1870, and finally in 1894 by the Act I of 1894, which Pakistan adopted as the present’ Land Acquisition Act, 1894′ after independence (Tarar, 2019). This act allows the state to exercise its inherent power to acquire property through state functionaries, e.g., CDA.

Rights related to the property are protected by the fundamental rights of property in the constitution of Pakistan. The essence of fundamental rights is rooted in the idea that the state cannot usurp these rights unless at the time of imposition of emergency, as the state of nature accrues them. However, under the umbrella of eminent domain, the condition can acquire private property for a public purpose, regardless of the unwillingness of the landowner to give away that property, which puts the landowners at an unfair disadvantage. Moreover, the term general purpose is not defined in the law and is interpreted through case law, which has broadened the understanding of public purpose from building schools to housing societies; the latter may be a necessity but not a ‘public good’ unless the purpose is to build affordable housing schemes. Similarly, the term ‘fair compensation is not explicitly defined, instead determined by a ‘competent forum’ ascribed in the Land Acquisition Act, which makes the exploitation inevitable.

Impacts on Development of Housing Societies

The power of compulsory acquisition is susceptible to abuse as it gives rise to unparalleled doorways for corruption and exploitation of power. It creates an imbalanced dynamic between the state functionary(s) and the private landowners, who are at an unfair disadvantage by not having the power to say no. Moreover, unfair procedures and inadequate compensation for the land defies the basic principles of equity and justice. The lacunas in the law are overtly exploited in clear defiance of the rule of law to develop various housing societies for the rich. It must be noted that eminent domain is only applicable for ‘public purpose,’ and its scope cannot be extended to acquire lands from the poor and sell them to the rich for high-end housing societies. For example, during the development of Islamabad in the 1960s, CDA acquired lands from people of the neighbouring villages for the urban planning of Islamabad. The landowners were allotted plots in different areas of Islamabad as compensation for their land. However, as evident through the case of ‘Noman Ahmed v Capital Development Authority,’ several petitioners moved the writ jurisdiction of the Islamabad High Court to demand justice, as they had not been allotted the promised plots decades after the acquisition of their lands. In its order dated 14th June 2021, the court ruled that this was a grave violation of the fundamental rights of the people and an apparent breach of the fiduciary duty of state functionaries. The court directed the Federal Government to form an acceptable policy for land acquisition. (Noman Ahmed v Capital Development Authority, 2021)

 

Effects of Change in the Law of Eminent Domain

Recently, the Government of Pakistan has decided to formulate a policy to halt CDA from acquiring land under the Land Acquisition Act, 1984. Multiple instances were reported where CDA acquired land from the poor landowners and granted them to influential people. Even though the current wave of rampant urbanisation has generated immense economic opportunities for the real estate sector and the allied industries, land acquisition for purposes of housing societies is an exploitation of the lacunas in the law of eminent domain, as it does not justify ‘public purpose’ since the high-end housing schemes do not fall within the bracket of the public good. The Government of Pakistan has taken a somewhat brave step by stopping CDA from acquiring any other lands under this act and promising fair compensation for past acquisitions. This is a step towards transparency in the real estate sector of Pakistan, a step towards restoring the faith in the rule of law and capitalising on the immense economic opportunities the real estate sector has generated.

 

Conclusion

The law of eminent domain needs an upheaval in the rapidly urbanising world. The acquisition of land without providing fair compensation and meeting the criteria of public purpose is a grave violation of principles of justice and equity. Moreover, the looming threat of dispossession on the landowners created distrust between the government and the people. Furthermore, the law of eminent domain has gone through immense changes across the world. Most of the codified constitutions around the globe stipulate the condition of ‘fair compensation and ‘public purpose’ to exercise the state’s power of an eminent domain. In Pakistan, the colonial-era land acquisition act provided multiple loopholes for exploitation. This resulted in the evident misuse of this law for the development of high-end housing societies. By stopping CDA from acquiring land in Islamabad, the Government of Pakistan has taken a step towards creating transparent practices in the real estate sector of Pakistan and eradicating corruption.

 

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