IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 6TH MARCH 2009 / 15TH PHALGUNA 1930 LA.App..No. 1491 of 2005 & C.O.27/06 -------------------------- LAR.197/2000 of III ADDL.SUB COURT, ERNAKULAM .................... APPELLANT(S): RESPONDENTS 3 AND 4. ---------------------------------- 1. KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, TRIVANDRUM. 2. THE EXECUTIVE ENGINEER, TRANSMISSION DIVISION, KERALA STATE ELECTRICITY BOARD, KALAMASSERY. BY ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB SRI.C.K.KARUNAKARAN, SC FOR KSEB RESPONDENT(S): CLAIMANTS. ------------------------- 1. PAUL.P.EAPEN, PULLIYATTU TUGALAN, KANDANAD P.O. ERNAKULAM DISTRICT. 2. MARY MATHEW, W/O.PAUL.P.MATHEW, DO. DO. 3. MEENA MATHEW, D/O.PAUL P.MATHEW, DO. DO. 4. MAJU MATHEW, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM. 5. STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM. 6. THE SPECIAL DEPUTY COLLECTOR (LA), ERNAKULAM. ADV. DR.GEORGE ABRAHAM FOR R2 TOR4 SRI.VARGHESE.J.PUNNACHALIL FOR R1 SR. GOVERNMENT PLEADER FOR R5 & R6 SRI.BASANT BALAJI THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 06/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PIUS C. KURIAKOSE & C.K.ABDUL REHIM, JJ. ----------------------------------------------- LAA. No. 1491 OF 2005 & C.O. No. 27/06 ----------------------------------------------- Dated this the 6th day of March, 2009 J U D G M E N T Pius C.Kuriakose, J. Kerala State Electricity Board, the requisitioning authority is in appeal against the judgment of the reference court in a case pertaining to acquisition of 92.20 Ares in Manakunnam Village for the establishment of a 110 K.V. Substation at Kandanad. As against claim for land value at the rate of Rs.50,000/- per cent the land acquisition officer awarded land value at the rate of Rs.5679/- per cent corresponding to Rs.14,032/- per Are. Under the impugned judgment the reference court would re-fix land value at the rate of Rs.17,255/- per cent. Apart from granting enhanced land value for the acquired property on the above basis the reference court has granted an amount of Rs.50,000/- as compensation towards injurious affection and a further amount of Rs.2 lakhs towards compensation for loss of road frontage. In this appeal, the appellant requisitioning LAA. N0. 1491/05 -2- authority contends that the reference court was not justified in not placing reliance on Ext.A2 basis document. The appellant also contends that the court below ought not have placed reliance on Exts.A11 and A12 under which the proposal submitted by the claimants to convey the acquired lands for a sum of Rs.11,900/- was accepted by the Kerala State Electricity Board. It is urged that the acceptance by the Kerala State Electricity Board was subject to a condition that possession of land should be immediately handed over and the proposal failed due to failure on the part of the claimants to surrender lands on time. It is urged that the reference court has granted considerable increase over even the land value proposed and conditionally accepted under Ext. A11 and A12 on the ground of passage of time. But there was no evidence adduced by the claimants to show that land value in the locality has increased during the time which had passed. The award of compensation towards LAA. N0. 1491/05 -3- injurious affection and further amount of Rs.2 lakhs towards compensation for loss of road frontage was not supported by any evidence and it is urged that in any event there is duplication in the matter of award of compensation under those counts by the reference court. Lastly it is urged in the appeal that more than what is due has been awarded towards the amounts eligible to the claimant under section 23(1-A) of the Act. 2. We have heard the submissions of Sri.C.K.Karunakaran, learned standing counsel for the Electricity Board and also those of Dr.George Abraham, learned counsel for claimant respondents 2 to 4. We have heard Sri.Basant Balaji, senior Govt. Pleader for R5 and R6 and we have heard Sri.Varghese J.Punnachal, learned counsel for the first respondent claimant also. Sri.C.K.Karunakaran, standing counsel would assail the judgment of the reference court on the basis of the grounds LAA. N0. 1491/05 -4- raised in the memorandum of appeal. He would draw our attention to judgment of the Supreme Court in G.M.Oil & Natural Gas Corporation Ltd. v. R.Jivanbhai Patel & another, (2008 SAR (Civil) 894) and submit that Kandanad in Manakunnam Village where the acquired property is situated is a rural area and therefore there is no justification for granting an increase of 15% per cent every year over the value reflected in A11 and A12 for passage of time. Mr.Karunakaran submitted that the proposals evident from Exts.A11 and A12 had never matured into a contract and the negotiations were broken due to the default of the claimants. He submitted further that there is no legal evidence to support the award of Rs.50,000/- towards compensation for injurious affection. The claim is based on the noise occasionally created by the transformers and other heavy machineries installed on the Sub-station constructed on the acquired property and the Advocate Commissioner's LAA. N0. 1491/05 -5- report is of no value in assessing the eligible compensation on the count of injurious affection. The learned counsel would strongly assail the award of a further amount of Rs.2 lakhs as compensation for loss of road frontage. The standing counsel would read over to us the commissioner's reports Exts. C1, C2 and sketch C1(a) and submit that there is nothing in those reports which will justify the award of Rs.2 lakhs on the above count. The amount has been awarded purely on guess work. 3. Dr.George Abraham who addressed most of the arguments on behalf of the claimants would draw our attention to the memorandum of cross objections filed by his parties and submit that the compensation awarded towards injurious affection is grossly inadequate. Learned counsel submitted that the total extent of the remainder property retained by the claimants after acquisition of a portion from their extensive holdings is 8.36 acres and LAA. N0. 1491/05 -6- therefore a further amount of at least Rs.1 lakh ought to be granted towards injurious affection. 4. We have anxiously considered the rival submissions addressed at the Bar. We have made a re-appraisal of the evidence which is available in this case. We are of the view that the learned Subordinate Judge was perfectly justified in placing reliance on Exts.A11 and A12 in preference to all the other items of evidence available in the case for determining the market value of the land which was acquired. Exts.A11 and A12 will show that in response to an offer by the claimants to sell their land extending to 2.15 acres for installation of the proposed 110 K.V. Sub-station at the rate of Rs.12,000/- per cent, the Kerala State Electricity Board requested the claimants to sell the property to them at a slightly lesser amount, i.e., Rs.11,900/- per cent and that the Board has accorded sanction for acquisition of the claimants' land at the rate of Rs.11,900/- per cent. It is LAA. N0. 1491/05 -7- clear from the evidence that both sides had agreed that the sum of Rs.11,900/- per cent was the market value of the land at the relevant time, i.e., 1-7-1995. Having agreed to purchase the land from the claimants at the rate of Rs.11,900/- per cent and issued Ext.A11 order the appellant Board cannot contend before the reference court that the market value of the land as on the date of A11 was lesser than Rs.11,900/- per cent. We feel that principles of estoppel have been correctly applied by the reference court in this case against the Electricity Board and the reference court acted correctly in proceeding on the basis that as on the date of Ext.A11 the correct market value of the land was Rs.11,900/-. Interestingly, the value which emerges on a cumulative reading of the other documents produced from the side of the claimants in support of their claim for enhancement of land value will also show that the correct market value of the acquired property at that time was LAA. N0. 1491/05 -8- more or less equal to the above sum of Rs.11,900/- per cent. 5. While we are endorsing the reference court's view that as on the date of Ext.A11 the prevailing market value was Rs.11,900/- per cent we are unable to approve the decision of that court in granting an increase of 45% over that amount taking into account the time that has passed between Ext.A11 and the publication of the relevant section 4(1) notification. It appears to us that the learned Subordinate Judge proceeded as if the time gap between the date of Ext.A11 and the date of section 4(1) notification is only 3 years and that is why total increase of 45% is given calculating increase at the rate of 15% every year. Supreme Court has in G.M.Oil and Natural Gas Corporation v. R.Jivanbhai Patel & another, (2008 SAR (Civil) 894) spoken about the percentage of escalation to be granted based on time lag between date of document relied on and LAA. N0. 1491/05 -9- the date of publication of section 4(1) notification. A Division Bench of this Court in the judgment in State of Kerala v. Jose Simon, (2009 (1) KLT 760) to which one among us (PCK(J) was also party, has followed the principles laid down by the Supreme Court in G.M.Oil and Natural Gas Corporation Ltd.'s case and noticed that increase of market value in urban and semi-urban areas is about 10% to 15% while the corresponding increase in rural areas can only be around half of it, i.e., about 5% to 7.5% per annum. Despite its proximity to the Municipal Town of Tripunithura and the developments which have taken place in and around Kandanad in the recent past we are unable to agree that Kandanad was an urban or even semi-urban area at the time of publication of Section 4(1) notification. The percentage of increase which should have been granted by the reference court for the time lag between date of Ext.A11 and the date of publication of section 4(1) notification, LAA. N0. 1491/05 -10- according to us, would not have been more than 7.5% per annum. But at the same time, the actual time lag is 4 years and not 3 years as the reference court appears to have thought. Therefore the maximum increase which could be granted every year on the sum of Rs,.11,900/- revealed by Ext.A11 is only 30% and according to us the land value which should have been determined for the acquired land is Rs.16,660/- per cent. 6. The fervent and persuasive submissions of Dr.George Abraham notwithstanding, we are unable to agree that the respondents claimants are entitled for a further amount of Rs.1 lakh towards compensation for injurious affection. According to us, the reference court erred seriously in awarding compensation for injurious affection and compensation for loss of road frontage separately. According to us, the award of Rs.50,000/ granted specifically towards injurious affection and the LAA. N0. 1491/05 -11- award of Rs.2 lakhs granted towards compensation for loss of road frontage are both compensations awarded to the remainder property of the claimants and hence will fall within the same count of compensation. We do notice that to a very slight extent the value of the remainder property belonging to the claimant has become reduced. Here again, we feel that the reference court was under the impression that road frontage of the remainder property has been lost by the acquisition. Even earlier the properties of the claimants were not abutting the road. A straight private road had been provided from the public road to the entire holding of the claimants. As a result of the acquisition the said private road had to be shifted a little with the result that the length of the road connecting the public road to the remainder property of the claimants has become slightly longer. The injurious affection to the building quantified by the reference court at Rs.50,000/- is virtually on account of LAA. N0. 1491/05 -12- the noise which may be created by the machineries installed in the Sub-station established on the acquired property. There is no acceptable legal evidence regarding the extent of noise and the impact the same may have on peaceful living in the building. According to us, no portion of the building has been directly affected by the acquisition and the building remains intact in spite of the acquisition. Diminution in value of the building at best can be only because of the situation that the private road which led straight into the building has been shifted as already indicated. According to us, applying the settled principle for computation of compensation for diminution in land value and taking into account the extent of dry land which remains under the possession of the respondents the maximum total compensation which could be awarded to the claimants towards the count of injurious affection is Rs.2 lakhs. The judgment of the reference court will have to be LAA. N0. 1491/05 -13- interfered with in this count also. We notice that a mistake has been committed by the reference court in awarding additional amounts under section 23(1-A). According to us, the above amount will be admissible only during the period from 23-4-1999 till 19-5-2000. 7. The result of the above discussion is that the cross- objection filed by the claimants will stand dismissed. The appeal will stand allowed to the following extent. The determination of market value of the acquired property by the reference court is set aside. The market value of the acquired land is re-fixed at Rs.16,660/- per cent. The total enhanced land value will stand re-fixed accordingly. The award of separate amount of Rs.50,000/- and Rs.2 lakhs by the reference court for injurious affection for the building and the remainder land is modified and it is held that the total amount which is to be awarded to the claimants towards injurious affection for both land and LAA. N0. 1491/05 -14- building is Rs.2 lakhs. It is clarified that the claimants are entitled for the additional amount under section 23(1-A) at 12%, only during the period from 23-4-1999 till 19-5-2000. Appeal is allowed to the above extent and the parties are directed to suffer their costs through out. (PIUS C.KURIAKOSE, JUDGE) (C.K. ABDUL REHIM, JUDGE) ksv/