Kerala High Court
Abraham Thomas vs State Of Kerala on 22 July, 2010
Bench: Pius C.Kuriakose, K.Surendra Mohan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
LA.App..No. 507 of 2006()
1. ABRAHAM THOMAS, KANNANETHU VEEDU,
... Petitioner
2. PRINCY THOMAS, D/O.ABRAHAM THOMAS,
3. BINCY THOMAS, D/O.ABRAHAM THOMAS,
4. PONNAMMA THOMAS, W/O.THOMAS, AGED 51
Vs
1. STATE OF KERALA, REPRESENTED BY
... Respondent
2. THE MANAGING DIRECTOR,
For Petitioner :SRI.M.NARENDRA KUMAR
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice PIUS C.KURIAKOSE
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :22/07/2010
O R D E R
PIUS C. KURIAKOSE & K. SURENDRA MOHAN, JJ.
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L.A.A. NOS: 507/2006, 277, 278 &
288 OF 2008
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Dated this the 22 nd July, 2010.
JUDGMENT
SURENDRA MOHAN, J.
These appeals are filed against awards passed by the Sub Court, Pathanamthitta in land acquisition references concerning lands acquired for establishing the processing park of KINFRA in Enadimangalam Village, Adoor Taluk. Though the Sub Court has granted enhancement in the compensation awarded to a limited extent, the claimants have preferred these appeals being dissatisfied with the enhancement that has been granted. Since all these appeals concern lands acquired for the very same purpose, they are considered and disposed of together.
2. L.A.A 507/2006 is filed against the judgment in L.A.R.14/2004 dated 4/3/2006 of the Sub Court, Pathanamthitta. An extent of 3.900 hectares of dry land in survey No: 340/1-42-2 of Enadimangalam Village in Adoor taluk was acquired pursuant to a Section 4(1) notification dated 19/12/2003. The property was taken possession of on 16/8/2004 and as per award No: 8/2004-05 dated 25/1/2005, the Land Acquisition Officer awarded a total LAA 507/2006 etc. 2 amount of Rs.33,66,395/- as compensation. Dissatisfied with the award amount, the power of attorney holder of the claimants sought for a reference to the Sub Court, for determining the actual compensation due to them. Accordingly, the Land Acquisition Officer referred the matter to the Sub Court under Section 18 of the Land Acquisition Act.
3. On receipt of notice from the Court, the power of attorney holder of the claimants filed statement contending that there were altogether 1700 yielding rubber trees in the property apart from coconut palms, pepper wines, jathi trees, teak trees, Anjali, Mahogany trees etc. It was contended that the timber value fixed by the awarding officer was very low when compared to the real value of the trees. According to the claimants the acquired land would yield a net profit of Rs.18,00,000/- per year. It was also contended that the land was situate in close proximity to a number of public institutions, educational institutions etc by the side of a panchayat road. Therefore, it was contended that the compensation awarded was too low. Accordingly, compensation was claimed on the basis of the yield of the property. The claim was opposed by the respondents disputing the assertions made on behalf of the claimants. According to the respondents, the LAA 507/2006 etc. 3 compensation awarded was just and proper and was arrived at by the Land Acquisition Officer after taking into consideration all the relevant aspects.
4. On the basis of the above pleadings, the Sub Court, Pathanamthitta tried the case. The evidence in the case consists of the oral testimonies of A.Ws 1 to 5 and R.W.1, besides Exts.A1 to A15, R1 to R4 and C1 to C4 documents. After the close of evidence, the matter was heard. The learned Subordinate Judge on a consideration of the rival contentions found that these are cases in which the capitalisation method should be adopted to arrive at the proper compensation that is payable to the claimants. Relying on the evidence of A.W.2 who is the Development Officer attached to the Regional Office, Rubber Board, Adoor who was considered to be an expert, the Reference Court held that the maximum dry rubber that an extent of 1 hectare of rubber would yield is 2500 kgs. On the basis of the above, it has been held that the total yield from the acquired property would be 8100 kgs. The Reference Court then found that the price of rubber at the time of execution was Rs.52 per kg. The Court adopted the multiplier of 10 to fix the total market value of rubber trees at Rs.42,12,000/-. The Court also awarded an amount of Rs.3,81,077/- as compensation for the LAA 507/2006 etc. 4 value of the building that was lost in the acquisition. An amount of Rs.71,698/- had been awarded by the Land Acquisition Officer as timber value of the trees lost in the acquisition. The Court held that there were no grounds to enhance the above value and therefore confirmed the same. The Reference Court also enhanced the value that was fixed for the fruit bearing trees in the property from Rs.4,000/- to Rs.40,000/-. Accordingly, a total compensation of Rs.47,29,775/- was found to be the actual compensation due to the claimants. After deducting the amount already awarded by the Land Acquisition Officer, it was found that the claimants were entitled to an enhanced compensation of Rs.13,63,380 together with all statutory benefits. In LAA 507/2006 the claimants attack the above findings of the Reference Court.
5. According to the counsel for the appellants, the well accepted method of computing the value of rubber trees lost in acquisition was by test tapping of the trees. In the present case though test tapping was conducted by deputing an Advocate Commissioner for the purpose, the data reported by the Advocate Commissioner were not relied on by the Reference Court. Instead, the Reference Court placed implicit reliance on the deposition of A.W.2 to hold that the maximum dry rubber that an extent of 1 LAA 507/2006 etc. 5 hectare would yield is only 2500 kg. The data supplied by the Advocate Commissioner after conducting test tapping was therefore discarded without any basis. Further, the prices adopted as well as the multiplier applied are wrong, it is contended. It is further pointed out that the timber value awarded, the value of building as well as fruit bearing trees are too low and do not represent the actual value thereof. According to the counsel for the appellants, there are 1400 yielding rubber trees in the property and therefore, the yield that is likely to be obtained yearly is to be taken into account for the purpose of fixing the market value. For the purpose, it is contended that the Reference Court should have fixed the yield on the basis of the test tapping conducted and the data contained in Exts.C1 to C4 commission reports. The appellants therefore claim a further amount of Rs.87,52,221/- as compensation.
6. L.A.A.Nos:277/2008 and 288/2008 challenge the common judgment of the Sub Court, Pathanamthitta dated 30/11/2007 in LAR Nos:22/2005, 69/2005 and 70/2005. The lands in all these cases were acquired as per a notification dated 19/12/2003 under Section 4(1) of the Land Acquisition Act. The lands were acquired for constructing the food processing park of KINFRA in LAA 507/2006 etc. 6 Enadimangalam Village, Adoor Taluk. The lands were categorised by the Land Acquisition Officer into four, those having frontage of the Panchayat road constituting the first category, those having frontage of estate road constituting the second category, those having frontage of jeep road constituting the third category and those with no road frontage constituting the fourth category. Though the claimants wanted the reference court to award compensation to them by adopting the capitalisation method, the reference court did not accept their contention holding that sufficient evidence was not available in the case for adopting the said method. Therefore, land value has been awarded in LAR 22/2005 at the rate of Rs.10,000/- per are, in LAR 69/2005 at Rs.7,000/- per are and in LAR 70/2005 at Rs.6,000/- per are. The above common judgment and decree are under challenge in these appeals.
7. These cases were tried together by the court below. The evidence in these cases consists of the oral testimonies of A.Ws 1 to 6 and Exts. A1 to A7 and C1 to C9 documents. No oral evidence was adduced by the respondents but exhibits R1 to R7 documents have been marked.
8. According to the appellants, the court below ought to have LAA 507/2006 etc. 7 found that the compensation in these cases was liable to be fixed by adopting the capitalisation method. It is pointed out that since there is no dispute regarding the number of yielding rubber trees that were acquired, by adopting the data in Exts.C1 to C4 commission reports and the data obtained from the Rubber Board, the capitalisation method could have been adopted by the court below. It is contended that, the certificate of the Rubber Board has been rejected on the basis of mere surmises and conjectures. It is also contended that the multiplier 12 should have been adopted for calculating the market value in these cases. On the above grounds, the appellants prayed for enhancement of the compensation fixed by the Reference Court.
9. We have heard Adv. M.Narendrakumar who appears for the appellants in all the cases, Smt. Latha T.Thankappan, the learned Govt. Pleader as well as Shri. G.Reghunath for the second respondent. We have gone through the records of the case and have given anxious consideration to the rival contentions raised before us.
10. According to the counsel for the appellants Shri. M.Narendrakumar, the rubber plantation in question was a very well maintained and scientifically planted one, yielding a very substantial LAA 507/2006 etc. 8 income year after year. According to the counsel, it was planted with the high yielding RR 11-105 variety of rubber. It is contended that the trees were yielding 2500 kg of rubber per tree. Therefore, the compensation awarded by the Reference Court was grossly inadequate, according to the appellants. The counsel has relied on the decision of this Court in State of Kerala v. Geevarghese Kathanar {1980 KLT 880} to contend that test tapping is the most efficacious method of assessing the value of rubber trees. It is pointed out that in these cases, test tapping had been conducted by deputing an Advocate Commissioner from the Court. However, the court below has not relied upon the report of such test tapping without any justification. According to the counsel, on a proper computation of the capitalised value of the rubber trees, the appellant should be entitled to even much more than the compensation that they have claimed. However, since they have limited their claims while filing the appeals they pray that these appeals may be allowed granting them the compensation as prayed for.
11. The contentions of the counsel for the appellants are stoutly opposed by the learned Govt. Pleader Smt. Latha T.Thankappan as well as Shri. G.Reghunath, counsel for the second LAA 507/2006 etc. 9 respondent. Shri. G.Reghunath points out that none of the appellants have been examined in LAR 14/2004. On their behalf, only their power of attorney has been examined as A.W.1. The counsel has placed reliance on the decision of the Apex Court in Janki Vashdeo Bhojwani v. Indusind Bank Ltd. {(2005) 2 SCC 217} to contend that the evidentiary value of the testimony of a power of attorney holder is only of very limited probative value. Therefore, it cannot be held that there was any reliable evidence in these appeals to support the cases pleaded by the appellants. The counsel has also relied on the decision of the Apex Court in Airports Authority of India v. Satyagopal Roy and others (AIR 2002 SC 1423) to submit that while adopting the capitalisation method, the correct multiplier to be adopted is eight. For the above reasons, it is contended by the counsel that the judgments of the Reference Court do not call for any interference in these appeals. Therefore, the counsel prayed for the dismissal of these appeals. The counsel for the appellants has replied to the contentions of the counsel for the second respondent pointing out that the compensation had to be fixed taking into account the evidence and other data available relating to the property acquired and the improvements lost in the acquisition. Since all the necessary data for determining the correct LAA 507/2006 etc. 10 compensation that is due to the appellants is available on record, the scope of oral evidence of the appellants themselves was only of a formal nature, that has been supplied by the evidence of the power of attorney. It is therefore submitted that non-examination of the appellants themselves was not of much consequence in these appeals. The counsel for the appellants has canvassed for the position that the correct multiplier to be adopted is ten and has placed reliance on the decision in Land Acquisition Officer, A.P., v. Kamadana Ramakrishna Rao {(2007) 3 SCC 526} to support his contention. In the said case, the Apex Court has adopted ten as the multiplier to fix the compensation payable.
12. In these cases, test tapping of the rubber trees have been conducted. A portion of the latex so obtained was also sent to the rubber board for being tested for the dry rubber content (DRC). The test tapping was conducted after selecting the rubber trees at random. Exts.C1 to C4 in LAR 14/2004 from which LAA 507/2006 arises and Exts.C1 to C3 in the other LARs from which the other three appeals are filed, evidence the result of such test tapping. It is worth noticing that no objections have been filed by the respondents to the above reports. However, since test tapping was conducted at a time when no regular tapping was being conducted LAA 507/2006 etc. 11 on the trees, certainly the yield as well as the dry rubber content reported would be more and therefore the said data cannot be taken as such. It cannot be lost sight of that both the yield as well as the dry rubber content would have varied, had the plantation been under regular tapping. Therefore, the data in the said documents can be accepted only with the above factors in mind. We also notice that there is no justification for discarding the said data altogether, as done by the Reference Court in LAR Nos:
22/2005, 69/2005 and 70/2005 which are the subject matter of LAA Nos:277/2008, 288/2008 & 278/2008 respectively. After discarding the data relating to the test tapping that was conducted, the Reference Court has proceeded to grant land value to the claimants on the basis of the value fixed by the Land Acquistion Officer for the land acquired.
13. In a similar situation another Division Bench of this Court has held in State of Kerala v. Geevarghese (supra) at page 882 as follows:-
"While evidence as to value of land similarly situate in the locality would be useful in determining the market value of the land where such evidence is not available and evidence of income of such land is available to the court the capitalised value based on LAA 507/2006 etc. 12 such income may be taken as market value. In fact it need not necessarily be that in the absence of evidence as to value of similar land alone a court could determine market value on the basis of capitalisation of income. Whatever be the method adopted it is intended ot find out what a willing purchaser would be prepared to pay as value of that land. But when once capitalised value of the income is adopted as the basis for determining land value there is no scope for awarding any additional value for the land separately. That is because in determining the market value on the basis of income what the court really does is to find out what any person would be willing to pay for a property such as the one acquired if it would yield the income that is determined by the court as that from the property acquired."
In the above cases, the claimants had submitted before the Reference Court that the capitalisation method be adopted for determining the land value in these cases. However, except in LAA 507/2006 the capitalisation method has not been adopted. In the other three appeals the capitalisation method has not been adopted by the court below on the ground that the data therein were not reliable. We do not think that the reasoning adopted by the court below in rejecting the said data is sustainable. A perusal LAA 507/2006 etc. 13 of the records in this case shows that Exts.C1 to C3 have been properly proved. Therefore, in all the cases the capitalisation method can be adopted, instead of the method adopted by the Reference Court, of fixing the land value as per the categorisation adopted by the Land Acquisition Officer, on the basis of the locational advantages enjoyed by the acquired properties. Regarding the reliability of test tapping of rubber trees, it has been observed in State of Kerala v. Geevarghese (supra) at page 885 as follows:-
"We have come across cases where courts are called upon to determine the income from rubber trees standing in acquired lands. The usual method adopted in those cases is to conduct test tapping of the trees. The yield obtained on such test tapping would be the basis for determining the annual income from the property. There are many factors to be taken note of. The yield determined by test tapping is one of the several factors. The season during which test tapping is done, the conditions under which such tapping is done, whether test tapping was done on the previous day also are some of the matters which are relevant in matter of the final result. It is well known that trees tapped once in two days yield LAA 507/2006 etc. 14 more than those tapped everyday. The yield of the trees would depend further upon very many factors such as the nature of the rubber trees, their age, attention given to them, the season and the like. Therefore even when results of test tapping are available to a court considerable care has to be take in making use of the data obtained by such test tapping to determine the annual income."
We are in respectful agreement with the above observation.
14. The next question to be determined while proceeding to apply the capitalisation method is to decide on the correct multiplier that can be applied. According to the counsel for the appellants, the correct multiplier to be applied is 12. The Reference Court has applied the multiplier 10. The counsel for the second respondent has placed reliance on the decision of the Apex Court in Airports Authority of India v. Satyagopal Roy {AIR 2002 SC 1423} wherein after considering a similar question, at page 1426, the issue has been concluded in the following words:-
"Under no circumstances, the multiplier should be more than 8 years multiplier, as it is a settled law of this Court in a catena of decisions that when the market value is determined on the basis of the yield from the trees or a plantation, 8 years multiplier LAA 507/2006 etc. 15 shall be the appropriate multiplier. For agricultural land 12 years multiplier shall be a suitable multiplier."
The counsel for the appellant on the other hand relies on the decision reported in Land Acquisition Officer,A.P v. Kamadana Ramakrishna Rao {(2007) 3 SCC 526} wherein it has been held that the computation of land value by adopting 20 as the multiplier though on the higher side did not call for any interference. In paragraph 20 of the said decision at page 532, the Apex Court has observed as follows:-
"The computation of compensation for determination of market value may be carried out on yield basis and multiplier of 20 adopted by the Reference Court in the cases on hand is on the higher side and contrary to the well-settled proposition of law as laid down by this Court.
However, this Court is not precluded from taking into consideration other circumstances such as, the potentiality and utility of the land acquired and awarding just compensation to the claimants who are deprived of their lands and other property." It is clear from the above observation that the multiplier in the said case has been sustained only in the peculiar facts thereof. We also notice that the above decision is by a Bench of two Judges whereas LAA 507/2006 etc. 16 the decision reported in AIR 2002 SC 1423 is by a Bench of three Judges. We further notice that this Court has adopted 10 as the multiplier in the case of rubber in a number of cases, considering the commercial value of rubber. Therefore, we adopt 10 as the multiplier in these cases also.
15. The appellants in all these cases have produced certificates from the Rubber Board/Rubber Research Institute showing the dry rubber content (DRC) in the latex that was obtained on test tapping from the rubber trees. The dry rubber content has been found to be ranging between 36 and 43 in these cases. Considering the fact that the trees were not being regularly tapped and that the latex had been obtained while conducting a test tapping, it is not safe to accept the data in toto. Some allowance would have to be made for the reduction in the dry rubber content that would result when the rubber trees are regularly tapped. In view of the above facts, we reduce the dry rubber content that can be taken into account from the actual figures seen in the certificates and fix the same at 30, to be adopted uniformly in all these appeals for the purpose of computation of the compensation.
16. On the basis of the test tapping conducted, 2.800 to 4 kg LAA 507/2006 etc. 17 of latex was obtained from 10 rubber trees. Considering that the above yield was obtained in a test tapping, some reduction has to be given. We therefore take 2.5 kg and 3 kg respectively as the yield in these cases. Therefore, compensation can be computed on the above basis, taking 30% of 2.5 kg or 3 kg as the case may be, to represent the dry rubber content. By multiplying the result with the number of trees, the yield of rubber has to be computed. The computation of the value of improvements in these appeals are as given below:-
L.A.A 288 of 2008 10 trees: 2.5kg latex x 30 (DRC) = .75 100 Yield for 240 trees per day (.75x24) = 18 kg Number of tapping days (18x100) = 1800 Value of rubber per kg = Rs.52.00 Income per year (1800x52) = Rs.93600/-
Multiplier = 10 Market value 93600 x 10 = Rs.9,36,000/- L.A.A.No: 277 of 2008 10 trees:3 kg. Latex x 30 (DRC) 100 = .9 Yield for 80 trees per day (8x.9) = 7.2 kg. LAA 507/2006 etc. 18 Number of tapping days = 100 Total quantity of rubber (7.2x100) = 720 kg Value of rubber per kg = Rs.52 Income per year (720x52) = Rs.37,440/- Multiplier = 10 Market value - 37,440x10 = Rs.3,74,400/- L.A.A.No: 278 of 2008 10 trees: 2.5kg. Latex x 30(DRC) = .75 100 Yield for 400 trees per day (40x.75) = 30 kg. Number of tapping days = 100 Total quantity of rubber (30x100) = 3000 kg. Value of rubber per kg = Rs.52 Income per year (3000x52) = Rs.1,56,000/- Multiplier = 10 Market value (1,56,000 x 10) = Rs.15,60,000/- L.A.A.No: 507 of 2006 10 trees: 3kg. Latex x 30 (DRC) 100 = .9
Yield for 1400 trees per day (.9x140) = 126 kg.
Number of tapping days per year = 100
LAA 507/2006 etc. 19
Yield per year (126x100) = 12600 kg.
Value per kilogram = Rs.52
Income per year (12600 x 52) = Rs.6,55,200/-
Multiplier = 10
Market value (Rs.6,55,200x10) = Rs.65,52,000/-
17. The above being the market value of the rubber trees due to the appellants, it is found that they are entitled to the above amounts in each of these cases.
18. In L.A.A.No: 507 of 2006 there is a residential building which is presently being used as the office of the KINFRA. Though the Advocate Commissioner with the assistance of an Engineer has valued the building at Rs.9,14,583/- the court below has granted only an amount of Rs.3,81,077/- as compensation. The above amount is being attacked as grossly inadequate. It is submitted that, at least considering the utility value thereof to the requisitioning authority, a reasonable amount should have been granted limiting the depreciation deducted. Considering the entire facts and circumstances of the case, we feel that depreciation in the present case can be limited to Rs.3.5 lakhs. On the above basis, the appellants would be entitled to a total compensation of Rs.5,64,583/- (Rs.9,14,583-3,50,000) for the building. LAA 507/2006 etc. 20
19. It is the further contention of the appellants in the said case that the court below also erred in not enhancing the value of the timber trees though they were got valued through a Commissioner. It is contended that the court below erred in discarding Ext.C1 report altogether. The report of the Commissioner has been rejected by the court below for the reason that the Commissioner had assessed the value approximately and not on any acceptable basis. Considering the value of the timber that has been lost in the requisition, we feel that an additional amount of Rs.1,00,000/- can be granted as compensation to the appellants under this head. We are not satisfied that the compensation granted for fruit bearing trees requires any enhancement.
20. To sum up, compensation due to the appellants in these appeals are as follows:-
L.A.A.No:288 of 2008
The appellants are entitled to enhanced compensation for the 240 rubber trees acquired from them which is fixed at Rs.9,36,000/- (Rupees nine lakhs thirty six thousand only). They are entitled to the balance amount after deducting the amount already paid by the Land Acquisition Officer. They are also entitled LAA 507/2006 etc. 21 to 12% additional increase on the enhanced market value from the date of the notification under Section 4(1) of the Act to the date of the award. The claimants are entitled to recover 30% solatium on the enhanced market value, interest at the rate of 9% per annum for a period of one year from the date of taking possession of the land and thereafter at the rate of 15% per annum.
L.A.A.No: 277 of 2008
The appellants are entitled to enhanced compensation for the extent of 1.7350 hectares of land acquired from them, the market value of which is fixed at Rs.3,74,400/- (Rupees three lakhs seventy four thousand four hundred only) arrived at by capitalising the value of 800 rubber trees. They are entitled to the balance amount after deducting the amount already paid by the Land Acquisition Officer. They are also entitled to 12% additional increase on the enhanced market value from the date of the notification under Section 4(1) of the Act to the date of the award. The claimants are entitled to recover 30% solatium on the enhanced market value, interest at the rate of 9% per annum for a period of one year from the date of taking possession of the land and thereafter at the rate of 15% per annum.
L.A.A.278 of 2008 LAA 507/2006 etc. 22 The appellants are entitled to enhanced compensation for the extent of 54.35 acres of land acquired from them, the market value whereof is fixed at Rs.15,60,000/- (Rupees fifteen lakhs sixty thousand only) by capitalising the value of 400 rubber trees. They are entitled to the balance amount after deducting the amount already paid by the Land Acquisition Officer. They are also entitled to 12% additional increase on the enhanced market value from the date of the notification under Section 4(1) of the Act to the date of the award. The claimants are entitled to recover 30% solatium on the enhanced market value, interest at the rate of 9% per annum for a period of one year from the date of taking possession of the land and thereafter at the rate of 15% per annum.
L.A.A.No: 507 of 2006
The appellants are entitled to enhanced compensation for the land acquired by them on the basis of the capitalised value of the rubber trees in their property as indicated above. They are thus entitled to compensation as given below:-
1. Capitalised value of rubber trees : Rs.65,52,000.00
2. Value of building : Rs. 5,64,583.00
3. Value of well : Rs. 5,000.00 LAA 507/2006 etc. 23
4. Value of tank : Rs. 20,000.00
5. Value of timber trees : Rs. 1,71,698.00
6. Value of fruit trees : Rs. 40,000.00
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Total amount of compensation : Rs.73,53,281.00 =================== They are also entitled to the balance amount after deducting the amount already paid by the Land Acquisition Officer. They are also entitled to 12% additional increase on the enhanced market value from the date of the notification under Section 4(1) of the Act to the date of the award. The claimants are entitled to recover 30% solatium on the enhanced market value, interest at the rate of 9% per annum for a period of one year from the date of taking possession of the land and thereafter at the rate of 15% per annum.
The above appeals are allowed on the above terms. The appellants shall also be entitled to proportionate costs.
PIUS C.KURIAKOSE Judge K. SURENDRA MOHAN Judge jj LAA 507/2006 etc. 24 LAA 507/2006 etc. 25