Kerala High Court
Kerala State Electricity Board vs M.J.John on 19 January, 2012
Author: K.T.Sankaran
Bench: K.T.Sankaran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.T.SANKARAN
THURSDAY, THE 19TH DAY OF JANUARY 2012/29TH POUSHA 1933
CRP.No. 34 of 2008 ( )
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OPELE.23/2005 of I ADDL.DISTRICT COURT, ERNAKULAM
REVISION PETITIONER(S)/RESPONDENT:
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KERALA STATE ELECTRICITY BOARD,
REPRESENTED BY SECRETARY, OFFICE OF THE
KERALA STATE ELECTRICITY BOARD
THIRUVANANTHAPURAM.
BY ADVS.SRI. ASOK M.CHERIYAN, SC, KSEB
SRI.PULIKOOL ABUBACKER, SC, KSEB
RESPONDENT(S)/PETITIONER:
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1 M.J.JOHN, AGED 50 YEARS,
S/O JOCKY, MUTTUNGAL HOUSE, PERUMPADAPPU
PALLURUTHY VILLAGE, KOCHI TALUK.
THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON
19-01-2012, ALONG WITH CRP. 35/2008 AND OTHERS, THE COURT ON THE
SAME DAY PASSED THE FOLLOWING:
K.T.SANKARAN, J.
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C.R.P.Nos.34, 35,
40 & 54 of 2008
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Dated this the 19th day of January, 2012
O R D E R
The Kerala State Electricity Board filed C.R.P. Nos.34 of 2008, 35 of 2008, 40 of 2008 and 54 of 2008 challenging the order dated 8th June 2007 in O.P. (Electricity) Nos.23 of 2005, 24 of 2005, 25 of 2005 and 26 of 2005 respectively. These four cases and five other connected matters were disposed of by the court below by a common order.
2. For drawing Aroor - Mattancherry 110 KV electricity line, lines were drawn through the property belonging to the respondents/claimants. Trees were also cut and removed from the properties of the respondents. All the items of immovable properties belonging to the respondents in the Revision Petitions as well as the claimants in the other five connected cases lie adjacent to each other. The properties are situated at CRP Nos.34, 35, 40 & 54 of 2008 2 Palluruthy, within the limits of Cochin Corporation. It is not disputed that Pallurthy is a densely populated area.
3. The respondents/claimants were not satisfied with the amount of compensation awarded by the Kerala State Electricity Board. They claimed more amount as compensation for cutting the trees. The Board did not grant any compensation on account of diminution of land value. The claimants contended that they are entitled to compensation for diminution of land value as well. As regards the compensation for cutting trees, the court below awarded enhanced additional compensation of ` 1,348/-, ` 3,818/-, ` 3,025/- and ` 18,081/- in the aforesaid four cases. The court below noticed that the claimants did not dispute the age, yield etc. of the trees arrived at by the Board. In respect of the trees, the claimants only contended that the Board was not justified in fixing 10% interest as the basis for fixing compensation on annuity basis. The court below relied on the larger Bench decision of this Court in Kumba Amma vs. Kerala State Electricity Board (2000 (1) KLT 542) and held that the rate CRP Nos.34, 35, 40 & 54 of 2008 3 of interest is to be taken as 5% while fixing the compensation on annuity basis.
4. The learned counsel for the petitioner submitted that the order passed by the court below is liable to be set aside in the light of the decision of the Supreme Court in K.S.E.B. v. Livisha 2007(3) KLT 1 (SC)).
5. In K.S.E.B. v. Livisha ((2007) 6 SCC 792 = 2007(3) KLT 1 (SC)), the Supreme Court referred to the decision of the larger Bench of the High Court in Kumba Amma v. Kerala State Electricity Board (2000 (1) KLT 542) and the earlier decisions of the Kerala High Court. The Supreme Court held thus:
"10. The situs of the land, the distance between the high voltage electricity line laid there over, the extent of the line thereon as also the fact as to whether the high voltage line passes over a small track of land or through the middle of the land and other similar relevant factors in our opinion would be determinative. The value of the land would also be a relevant factor. The owner of the land CRP Nos.34, 35, 40 & 54 of 2008 4 furthermore, in a given situation may lose his substantive right to use the property for the purpose for which the same was meant to be used.
11. So far as the compensation in relation to fruit bearing trees are concerned the same would also depend upon the facts and circumstances of each case.
12. We may, incidentally, refer to a recent decision of this Court in Land Acquisition Officer, A.P. v. Kamandana Ramakrishna Rao & Anr. reported in 2007 AIR SCW 1145 wherein claim on yield basis has been held to be relevant for determining the amount of compensation payable under the Land Acquisition Act, same principle has been reiterated in Kapur Singh Mistry v. Financial Commission & Revenue Secretary to Govt. of Punjab & Ors. 1995 Supp. (2) SCC 635, State of Haryana v. Gurcharan Singh & Anr. (1995 Supp. (2) SCC 637) para.4, and Airports Authority of India v. Satyagopal Roy & Ors. (2002) 3 SCC 527. In Airport Authority (supra), it was held:-
"14. Hence, in our view, there was no reason for the High Court not to follow the decision CRP Nos.34, 35, 40 & 54 of 2008 5 rendered by this Court in Gurucharan Singh's case and determine the compensation payable to the respondents on the basis of the yield from the trees by applying 8 years' multiplier. In this view of the matter, in our view, the High Court committed error apparent in awarding compensation adopting the multiplier of 18."
6. In Kumba Amma v. Kerala State Electricity Board (2000 (1) KLT 542), the larger Bench held thus:
"44. Next, we have to consider what should be the rate of return to be applied in this case. As mentioned earlier, regarding the rate of return, the only contention raised by the petitioners is that it should be 5% as held in 1961 KLT 238 and not the higher rate as ordered in 1981 KLT 646. Even though reliance was placed by the petitioners on AIR 1988 AP 89 in support of their contention that the principle applied in 1981 KLT 646 was not correct, it is not contended by the petitioners before us that in their case, the rate of return as assessed by Jagannadha Rao, J. in AIR 1988 AP 89 should be applied. The dispute in this case arose when trees standing in petitioners' property were cut down on 9.9.1980. The CRP Nos.34, 35, 40 & 54 of 2008 6 respondents have not made available before us any material to show that the real rate of interest in 1980 was something different from 5%. Their only contention based on 1981 KLT 646 is that what is relevant is the prevalent rate of interest which was 10%. This contention we have already rejected, as such rate does not take into account the factor of inflation. Under these circumstances, we hold that the rate of interest to be applied in the present case is 5%. We hasten to add that we should not be understood as having laid down 5% as the real rate of interest for subsequent period. The rate of interest applicable in India has been held as 4% by Jagannadha Rao, J. in AIR 1988 AP 89. 11 years have lapsed after the above judgment. Whether it should be the same rate of return that has to be applied for the period before and after the above judgment or whether a higher or lower rate, is a matter to be decided in appropriate cases where relevant data is available. Till such time, the Board will adopt 5% as rate of return. But, we make it clear that cases finally concluded by decisions of the Court will not be reopened."
7. After the decision in Kumba Amma's case, the Board has not fixed any rate for the purpose of fixing compensation on CRP Nos.34, 35, 40 & 54 of 2008 7 annuity basis. However, from the various orders passed in the claims, it is seen that the Board has uniformly adopted 10% even after the decision of the larger Bench in Kumba Amma's case. To that extent, it shows that the Board never cared to follow the larger Bench decision in Kumba Amma's case.
8. In Kumba Amma v. Kerala State Electricity Board (2000 (1) KLT 542), the larger Bench also noticed as to how the real rate of interest is to be computed and it was held thus:
"10. Now, we will consider what is meant by `real rate of interest' and its relevance in computation of compensation. Prof. Paul A. Samuelson defines `real interest rate' as the "money interest rate" minus "the percentage price rise". Thus, if the money rate is 9% and the annual price rise is 7%, then the true real rate of interest is 9 - 7 = 2%. (See Economics, by Paul A. Samuelson, 11th Edn. (International Student Edition) Page
566)."
While fixing 10% as the rate of interest, the Board has not taken into account the rate of interest prevailing and the percentage of CRP Nos.34, 35, 40 & 54 of 2008 8 inflation. In other words, there is no material to indicate that the Board applied its mind and fixed the rate of interest on the basis of the actual data available as on the date of tree cutting. On the other hand, the Board ritualistically followed 10% as the rate of interest, even ignoring the larger Bench decision in Kumba Amma's case.
9. In the Monetary Policy Statement 2010-11 issued by the Reserve Bank of India, it is stated in paragraph 32 thus :
"32. Notwithstanding the current inflation scenario, it is important to recognise that in the last decade, the average inflation rate, measured both in terms of WPI and CPI, had moderated to about 5 per cent from the historical trend rate of about 7.5 per cent. Against this background, the conduct of monetary policy will continue to condition and contain perception of inflation in the range of 4.0-4.5 per cent. This will be in line with the medium-term objective of 3.0 per cent inflation consistent with India's broader integration into the global economy." CRP Nos.34, 35, 40 & 54 of 2008 9
10. A learned single Judge of this Court, after referring to the decisions in Kumba Amma v. Kerala State Electricity Board (2000 (1) KLT 542) and K.S.E.B. v. Livisha ((2007) 6 SCC 792 = 2007(3) KLT 1 (SC)), held in C.R.P.No.892 of 2006 as follows:
"5. Perusing the impugned order, it is seen, the Board had assessed the compensation towards the value of trees cut and removed at 10% annuity and the court below taking note of the principles laid down in Kumba Amma v. Kerala State Electricity Board (2000 (1) KLT 542) passed by this Court, reassessed the compensation payable for fixing such compensation at 5% annuity. I find nothing in the decision rendered by the apex court in Livisha's case (supra) to hold that the assessment of the compensation following the principles laid down in Kumba Amma's case (supra) cannot be made applicable depending upon the facts and circumstances of the case. The apex court has held that compensation in relation to fruit bearing trees are concerned, the same would depend upon the facts and circumstances of each case. Of course in a case where it is shown that fixation of compensation at 5% annuity would cause prejudice or injury to any of the CRP Nos.34, 35, 40 & 54 of 2008 10 parties involved depending upon the facts and circumstances in the case, a different yardstick can be applied for. No such special circumstance is made out in the present case to hold that the principles laid down in Kumba Amma's case are inapplicable to the case...."
11. For the aforesaid reasons, I do not find any ground to interfere with the award granting enhanced compensation by the court below for the trees cut and removed from the property of the claimants.
12. The Board did not grant any compensation for diminution of land value. The claimants submitted that the property is situated in an important locality within the Cochin Corporation limits and the land has commercial and residential importance. The claimants relied on Exhibit A1 sale deed dated 20.9.1995 where under an extent of 6.15 cents of land was sold for a consideration of ` 4,05,900 which works out to a centage value of approximately ` 66,000/-. Exhibit A1 property was purchased by Dheevarodharini Sabha of which PW1 was the CRP Nos.34, 35, 40 & 54 of 2008 11 president. Exhibit A1 property is situated about 250 metres to 600 metres away from the properties of the claimants as reported by the Commissioner in his reports. The Commissioner had also submitted plans of the different items of properties over which the electricity lines were drawn. The court below relied on the Commissioner's reports and plans and held that as on the date of cutting of trees, the value of the property would be ` 1,00,000/- per cent of land. The court below held that Exhibit A1 property is similar and similarly situated as the properties of the claimants. The court below noticed that Exhibit A1 was executed in 1995 while the trees were cut in 2000. Applying the principles in Special Land Acquisition Officer, BTDA, Bagalkot vs. Mohd. Hanif Sahib Bawa Sahib (2002(3) SCC 688), the court below held that the value of the land is to be taken as ` 70,000/- per cent of land, taking appreciation of land value per year at 10%.
13. As regards the Commissioner's report, the court below held thus :
CRP Nos.34, 35, 40 & 54 of 2008 12
"It is stated by the Commissioner in Exhibit C1 report that he has measured the properties covered in all these cases and also has shown the location of the electric lines passing through the said properties and he has fixed the affected area with the assistance of the surveyor. In Exhibit C1(a) to (i) plans he has correctly shown the total extent of the land, location of the land, location of the electric line drawn over these properties and thus fixed the affected area. No serious objection was raised to these plans and reports. So Exhibit C1, C1(a) to (i) are accepted. Basing on this the diminution in land value has to be fixed."
14. The extent of lands belonging to the claimants are respectively 14.250 cents, 7.700 cents, 7.500 cents and 23 cents. The area affected by the drawal of the line was found to be 11.650 cents, 4 cents, 1.587 cents and 5.580 cents respectively. The court below fixed the compensation for diminution of land value, taking 35% of the land value as the basis. Thus the court below awarded compensation of ` 3,76,425/-, ` 98,000/-, ` 38,881/- and ` 1,36,710 respectively as compensation for CRP Nos.34, 35, 40 & 54 of 2008 13 diminution of land value. In O.P.No.23 of 2005, the court below held that a tower was erected in the property of the claimant therein, which occupied an extent of 2 cents. Therefore, the full land value was paid for an extent of 2 cents.
15. The learned counsel for the petitioner submitted that the land value fixed by the court below at ` 70,000/- is very high. The counsel also submitted that 35% of diminution as the basis for fixing compensation was unjustified.
16. The court below relied on the data made available to it by Exhibit A1 sale deed, the oral evidence of PW1 and the Commissioner's reports and plans. As against these, no evidence was adduced by the Kerala State Electricity Board. Exhibit A1 is a document which came into existence five years before the drawal of the electricity line and cutting of trees and it was executed at an undisputed point of time. Exhibit A1 sale deed was executed in favour of a Sabha. PW1 was the President of the Sabha and therefore, he was competent to speak about the same. There is CRP Nos.34, 35, 40 & 54 of 2008 14 no case that a fancy price was given for the property covered by Exhibit A1 or that Exhibit A1 property is situated in a more important area or it is having potentialities different from those of the properties belonging to the claimants. The Commissioner's reports would indicate that Exhibit A1 property is similar and similarly situated as the properties of the claimants. There is nothing to indicate that Exhibit A1 cannot be taken as the basis for fixing the land value. The court below held, following the decision of the Supreme Court in Special Land Acquisition Officer, BTDA, Bagalkot vs. Mohd. Hanif Sahib Bawa Sahib (2002 (3) SCC
688) that appreciation at the rate of 10% for every subsequent year after the base year was neither excessive nor unreasonable. On that basis, the court below held that the land value at the relevant time could be fixed at ` 70,000/- per cent. The finding arrived at by the court below does not call for any interference.
17. The court below was also justified in fixing the diminution of land value at 35% of the land value. The extents of properties held by the claimants are not larger extents. The lands CRP Nos.34, 35, 40 & 54 of 2008 15 are situated in an important area. It was held that the land has commercial importance. The lines were drawn across the property. In the facts and circumstances of the case, I am of the view that the finding of the court below that 35% of the diminution of land value should be taken as the basis, is legal and proper, particularly, in the light of the decision of the Supreme Court in K.S.E.B. v. Livisha (2007(3) KLT 1 (SC)).
For the aforesaid reasons, I do not find any ground to interfere with the well considered order passed by the court below. The Civil Revision Petitions are accordingly dismissed.
K.T.SANKARAN JUDGE csl