Karnataka High Court
T. Giri Thimmaiah vs Karnataka Electricity Board And Ors. on 14 August, 1998
Equivalent citations: AIR1999KANT32, AIR 1999 KARNATAKA 32
ORDER Hari Nath Tilhari, J.
1. This Civil revision under Section 115 of CPC. arises from the order passed by the District Judge, Chitradurga, dated 28-9-1993 in Misc. Case No. 31/90 in proceedings under Section 16(3) of Indian Telegraph Act, 1885, hereinafter referred to as Act No. 13/1885.
2. The facts of the case in the nut shell are that the petitioner has been the owner in possession of land comprised in Sy. Nos. 160/2, 159/2, 31/1, 158/2 and 23/1C measuring about ten acres in total at. T. Nagenahalli, Hiriyur Taluk, Chitradurga District. Petitioner on his land had grown Coconut Trees, Tamarind Trees, Neem Trees etc., all were fruit bearing trees. During December, 1989, the respondents with a view to lay 220 KV transmission line between Hiriyur and Gowribidanur passing through the said lands of the petitioner, issued notice dated 2-12-1989 and thereafter cut and removed 48 fruit bearing coconut trees, 4 tamarind trees, 8 Neem trees and according to the petitioner certain other trees in all 64 trees. The case of the Revision Petitioner is that on 27-1-1990, the respondents paid to the Revision Petitioner a sum of Rs. 20.344/- as per the Schedule of rates fixed by them vide G.O. No. KEB/319/7654/84-85 dated 1-8-1988 (Exhibit D1). According to the petitioner's case, the petitioner received the said amount under protest as the amount was inadequate and unreasonable compensation paid by the Board. The Revision Petitioner initiated the proceedings under Section 16(3) of the Indian Telegraph Act, 1885, before the Court of the District Judge at Chitradurga, making a claim of compensation having regard to the age of the fruit bearing trees and the capitalisation of the amount based on certain number of years. The claimant put the claim as under :
(1)48 Coconut trees - 5l,600/-year x 15 years (at the rate of Rs. 3/- per coconut) = 7,74,000/-(2)
4 tamarind tees = 30,000/-(3)
9 Neem trees, 7 jally trees and one Eachala mara = 26,000/-
Total = 8,30,000/-
Less : Compensation awarded = 29,344/-
Balance = 8,00,656/-
3. According to the petitioner's case, the learned District Judge relied on the Schedule rates as exhibited by Ex D. 1 which had been fixed in 1984-85 and then assessed and awareded compensation as under :
(a) 48 coconut trees at Rs. 803/- per tree = Rs.
38,496/-
(b) 8 Neem trees at the rate of Rs. 120/- per tree = 960/-
(c) 4 tamarind trees at the rate of Rs. 400/-
= 1,600/-
(d) 4 Honge trees at the rate of Rs. 48/-
= 192/-
Total = 41,248/-
Less : Compensation paid = 29,344/-
Balance = 11,904/-
Feeling aggrieved from the order and award of the District Judge, the claimant-petitioner in Misc. No. 31 /90 has come up before this Court by filing the civil Revision Petition under Section 115 of the Code of Civil Procedure.
4. I have heard Sri N. Devadas, an Advocate of this Court representing M/s. Nyayamitra, on behalf of the petitioner, and Sri R. Rudre Gowda, learned counsel for the respondent.
5. Sri Devadas, learned counsel for the petitioner contended that the Court below has acted illegally and against the well settled principles of law regarding the valuation of the fruit bearing trees and acted illegally in assessing the compensation at the rate of the price of the trees exhibited as officially determined, vide Ex. P. 1. Learned counsel contended that under Section 10 of the Act, it has been provided and directed that in exercise of powers conferred under Section 10, the Telegraph Authority shall do as little damages as possible and when it has exercised those powers in respect of those properties other than referred to in clause (c) of the section, it shall pay the full compensation to ail the persons interested for any damage sustained by them by reason of exercise of its powers. Learned counsel contended that the scheme of the provision under Section 10 of the Act clearly shows that intention of the framers of the legislation is that least possible damage may only be done by the Telegraph Authorities when exercising powers under Section 10 in regard to maintenance of telegraph lines under and over and across a property. Learned counsel submitted that provision directs that full compensation is to be paid to the persons interested in damage. Learned counsel submitted that the expression 'full compensation' used in the section is the term of utmost importance. Compensation, no doubt, learned counsel contended, means that he shall be paid the money or goods that may be sufficient enough to completely compensate the loss. Learned counsel contended that in addition to the compensation, the Legislature has expressly used the expression "full" along with the compensation. Learned counsel for the revisionist contended that use of expression 'full' does not merely mean the price of the property which had the potential to provide regular recurring income. Learned counsel contended that the expression 'full' compensation' includes in itself the compensating of the loss regarding income from those objects taking into the period upto which or during which or the years for which that income would have accrued at time to time. Learned counsel contended that cutting of the trees was not only the loss of the trees property, but it has resulted in the loss of recurring income which these trees and their fruits did provide in particular, coconut trees, tamarind trees and other trees. Learned counsel contended that the learned District Judge did not apply his mind to this aspect of the matter. Learned counsel contended that the District Judge acted illegally when he acted in breach of these well settled principles of law for determination of the compensation or full compensation for the trees. Learned counsel for the petitioner contended that apart from the trees and valuation of the trees, the claimant should have been awarded compensation for the loss of recurring income from the product of the trees. Learned counsel contended that this is not a question of what is the quantum of amount of compensation assessed erroneously awarded, but here is a case where the basic principles of law relating to assessment of compensation or say, full compensation have been ignored and the significance of the expression 'full compensation' has not been taken into view by the learned District Judge. As such, this is a fit case for interference with the order of the learned District Judge under Section 115 of CPC as it amounts to District Judge illegally on account of his failure to take in view and apply the relevant and essential yards and principles, in law.
6. These contentions of the learned counsel for the revision petitioner have hotly been contested by Sri. R. Rudre Gowda, learned counsel for the respondents.
The learned counsel for the respondents contended that powers of revision under Section 115 of this Court are limited and circumscribed by the conditions to be satisfied under Section 115 of IPC. Sri Rudra Gowda contended that the quantum of damages awarded or to be awarded as compensation or its assessment or the quantum of amounts assessed rightly or wrongly is not something which can be interfered with by this Court under Section 115 of CPC. Sri Rudre Gowda submitted that jurisdiction of this Court is confined to jurisdictional error either usurption thereof which is not vested or illegal refusal to exercise jurisdiction vested or Court's acting illegally and with material irregularity in exercise of its jurisdiction vested in it and unless error is shown to be coming within the four comers of either the Clauses (a), (b) or (c) and is established and injustice is shown to be emanating from the order, this Court, as laid down in very many cases, has no jurisdiction to interfere with the order awarding compensation and the quantum of compensation fixed. Learned counsel further contended that primarily this revision is concluded by pure finding of fact and this does not call for interference by this Court under Section 115. Learned counsel contended that the learned District Judge did not commit any error instead he has tried to award the best possible compensation, In these circumstances of the case therefore, revision may be dismissed.
7. I have applied my mind to the contentions made by the learned counsel for the parties. There is no dispute so far as basic principle of law under Section 115 is concerned that the jurisdiction of this Court can be exercised and suitable orders can be passed in cases where the order passed by the subordinate Court suffers from jurisdictional error within the framework of either of the three Clauses (a), (b) or (c) of Section 115 and ordinarily a finding of fact cannot be interfered with in exercise of its jurisdiction under Section 115 unless the said findings can be shown and be held to be the result of jurisdictional error or Courts acting illegally or with material irregularity only. Acting illegally means acting in breach of settled principles of law or provisions of Act and acting with material irregularity refers to the acting of the Court in a manner amounting to error of proce-difre. Keeping these basic principles, we have to proceed. But it has to be taken note of when a Court committing breach of material principles applicable or in breach of certain principles of law, it may be a case of Court acting illegally under Section 115 of CPC, may be the Court acting on a misapprehension of those basic principles, may it be that, the error has crept in because of Court's not applying its mind to the relevant basic principles.
8. Keeping the above basic principles, this Court proceeds to examine. Sec. 10 of the Indian Telegrapli Act, 1885 reads as under:
"Sec. 10. Power for Telegraph Authority to place and Maintain Telegraph Lines and Posts :
The telegraph authority may, from time to time, place and maintain a telegraph line under, over, along or across, and posts in or upon, any immoveable property :
Provided that -
(a) the telegraph authority shall not exercise the powers conferred by this section except for the purpose of a telegraph established or maintained by the (Central Government), or to be so established or maintained;
(b) the (Central Government) shall not ac quired any right other than that of user only in the property under, over, along, across, in or upon which the telegraph authority places any tele graph line or post; and
(c) except as hereinafter provided, the telegraph authority shall not exercise those powers in respect of any property vested in or under the control or management of any local authority, without the permission of that authority; and
(d) in the exercise of the powers conferred by this section, the telegraph authority shall do as little damage as possible, and, when it has exercised those powers in respect of any property other than that referred to in Clause (c); shall pay full compensation to all persons interested for any damage sustained by them by reason of the exercise of those powers."
The use of the expression 'full compensation' in this section that 'Telegraph Authority' shall pay full compensation is an important expression. This provision per se indicates that no person should be made to suffer toss on account of activities of State and is to be compensated to the full extent to mitigate the loss suffered on account of the action of the authority. What is the importance of this expression 'full compensation' and what is its meaning, these questions call for an answer and may have to be considered. Here, the Act of 1885 uses the expression 'full compensation'. The mandate of law is that in case of damage caused in exercise of power under Section 10 of the Act, with respect to any property, other than one referred to in in Clause (c), the Telegraph Authority shall pay full compensation to all persons interested and entitled for the damage caused on account of exercise of powers under Section 10. Use of 'full compensation' very clearly connotes the idea that every effort shall be made to fully compensate the person for the loss and damage. With reference to Water Works Clauses, Act 1847 particularly Section 6 thereof. In Stroud's Judicial Dictionary, it has been observed :
"(2): In determining what was the 'full compensation' to be made by the undertakers under Water Works Clauses Act, 1847 (C. 17), Section 6 --see also Water Act 1945 (C. 42) when they required a. colliery owner to leave unworked a seam of coal, 'the true inquiry is not as to the value of the coal-field or of the coal, but as to what the colliery owner, if he had not been prohibited, would have made out of the coal during the time it would have taken him to get it".
(see Stroud's Judicial Dictionary, 5th Edition, page 1060).
In Words and Phrases (permanent Edition), Vol. XVII-A at page 482, with reference to the expression 'full compensation', it has been defined as under:
"The phrase 'full compensation' as used in provision of Constitution that no private property, nor right of way shall be appropriated until 'full compensation' therefor shall be first made, means nothingness than payment for that which the property owner is being deprived of. Meyers v. City of Daytona Beach, 30 So. 2d 354, 355, 158 Fla. 859."
In the case of The Bwllfa and Merthyr Dare Steam Collieries (1891), Limited v. The Pontypridd Water, Phillimore, J., observes Law. (Reports 1901 (2) KB 708/805) :--
'The Water works company here have not bought the coal-field; they have not even bought the coal; they have only bought the right to prohibit the owners of the coal from getting it. The true inquiry is not what is the value of the coal-field or of the coal, but what would the colliery company, if they had not been prohibited have made out of the coal during the time it would have taken them to get it. Assuming that it would have taken them five years, the real loss to the colliery company is what they would have made by getting the amount of coal they naturally would have got in the first year, in the second year, and soon."
This decision reveals that in such cases what has to be looked into is what is the real loss that is the profit which the party would have made out who is being deprived of that property.
In the case of, Richard v. The Great Western Railway Company (Law Reports 1905 (1) KBD 68, it has been observed .
"Taking those two decisions together, it appears that the matter to be determined is not what is the price to be paid as upon a sale, but what is the sum to be assessed by way of compensation."
Justice Collins M. R. quoted with approval the observations * from the decision of House of Lords in the case of Bwllfa and Merithyr Dare Steam Collieries v. Pontypridd Waterworks Company :--
"Held, that there was no purchase of the coal or transfer of the property in the coal; that the inquiry was not what was the value of the coal at the date ofthe counter-notice, but what would the coal owners, if they had not been prohibited, have, made out of the coal during the ti me it would have taken them to get it; and that the evidence was admissible."
Stirling L.J., observes, "The property remains where it was. The mine owner is prohibited from working, and (he undertakers are bound to make full compensation. That is all."
These observations reveal that what is to be looked into is the real loss in the sense that is what profits a person would have made from working and user of that property.
9. In the case of Municipal Corporation of the City of Ahmedabad v. State of Gujarat in the context of the Bombay Provincial Municipal Corporation Act, 1949, in the context of Sections 212 and 216 which provided for the compensation being payable under Sections 211, 212, 230 and 240 for any loss which the owner may sustain in consequence of his building or land being acquired and for any expense incurred, observed (at page 1736 of AIR) :--
"It appears to us that this very difficulty in specifying any known rule of compensation is responsible for the wording of Section 216 and Section 389 of the Act which, in our opinion, gets over the difficulty by providing full indemnification for the loss or deprivation suffered by the owner of the building or other interests in the property. We have referred to the provisions with regard to appeals. The first appeal lies to the Judge of the Small Cause Courts and a second appeal to the District Judge. The involvement of Civil Courts in finally determining compensation imports judicial norms. Since full indemnification in accordance with Judicial norms is the goal set by the Act it is implicit in such a provision that the rules far determination of compensation shall be appropriate to the property acquired and such as will achieve the goal of full indemnity against loss. In other words, the Act provides for compensation to be determined in accordance with judicial principles by the employment of appropriate methods of valuation so that the person who is deprived of property is fully indemnified against the loss. This, by itself, in our opinion, is a specification of a principle for the determination of compensation......................
........... Any arbitrary determination is bound to be set aside in appeal because the Judges in appeal will be chiefly concerned to see whether the enquiry is made in accordance with normal judicial procedures for evaluating the loss by the application of methods of valuation appropriate to the particular acquisition before them".
These observations of their Lordships will apply with full force to the interpretation of Section 10(d) of the Indian Telegraph Act, 1885.
10. Thus considered, it appears that those principles have to be kept in view in determining the full compensation which will be appropriate to achieve the goal of full indemnity for the loss. The expression "full compensation" for the loss or deprivation suffered really give the guidelines and indicate principles. We have to look to the nature of the property, we have to look to the possible profits arising there from which the owner of the property, be at streets, is likely or being deprived of those profits as well in addition to the corpus of property. So therefore in the case of State of West Bengal v. Banerjee, the compensation has been defined to refer which is equivalent to the amount which the owner has been deprived of. A Division Bench of Kerala High Court in the case of Kerala State Electricity Board v. Varghese Thomas, has observed (at page 239) :--
"It can hardly admit of any doubt, particularly in the case of an agricultural land, that the destruction of a fruit bearing or yielding or income producing tree standing on it, deprives the owner of its usufruct for the period during which it would be productive, and causes damage to that extent; nor is it possible to deny, that it is specific item of damage which can be valued and assessed, though in a given case, it may be combined with other damage."
It is the deprivation of the use or profit for the period during which the fruit bearing tree would be productive as to which on the destruction of the fruit bearing tree, the owner of those trees may be deprived of and this deprivation of use of the trees has to be compensated. The Kerala High Court further observed.
"In assessing damage on account of the destruction of fruit bearing or yielding, trees, it is a permissible and often a simple method, to base it on the usufruct of which the owner has been deprived, without embarking upon an enquiry as to the market value of the land before and after the damage was caused."
In majority of cases, the simplest and straight forward course in such cases is to ascertain the yield of tree during the period of its productivity in future. In that context, what it is to be looked into is the age of the trees, their productivity i.e., the period at which they start to produce fruits and the period during which i.e., upto what age they will continue to produce the fruits in future. The method of capitalisation may be like, the net value of the product yielded by the fruit bearing tree every year multiplied by the period during which its productivity is continued. It has been held in some cases of trees other than coconut trees such as teak trees for timber ten times of annual yield. So far coconut trees or Arecanut trees are concerned, they have to be valued at 20 times or at least 15 times of the annual yield. It is the net profit i.e., gross profit reduced by the cost of cultivation from gross profit, net annual profit or value has to be assessed and then the annual net profit is to be multiplied by the multiplier running in between 15 to 20 keeping in view the age of the tree, its productivity as well as chances of natural calamity on the average of net income. Really it is not a case of sale or purchase of the trees, but it is really a case where a tree has been cut because of the act of the State or Department. We have to look into the profit or earnings which if the tree would not have been cut, the owner of the tree would have earned out of the yields. That has to be compensated.
11. In the present case, no evidence has been produced on behalf of the respondents i.e., the Karnataka Electricity Board. Here in the present case, the court below has proceeded as if it was a case for sale and assessed the compensation on the basis of the price of the trees as at the rate of Rs. 800A per tree or its market value. This ap pears not to be correct one. Here what was the annual yield from each tree has to be looked info.
So far as fruit bearing trees are concerned, may be coconut trees, may be Tamarind trees, annual yield has to be calculated as follows :--
Annual yield minus the cost of production i.e., the net annual yield multiplied by the relevant multiplier.
The life span of the Coconut tree has been stated by the P.W. 1 to be running in between 85 years to 100 years while witness produced on behalf of the claimant i.e., P.W. 2 has also stated the life span of the Coconut tree to be 100 years. It has been stated that from the date of planting of coconut tree, after the period of ten years or twelve years the trees start yielding fruits. The yielding period runs from the period of ten years to eighty years and during the period from fourty years to eighty years, the trees yield good number of fruits. It has been stated by P.W. 2 who is a Horticulture Officer that a tree of ten to twelve years would yield 30 to 40 coconuts per yean Its leaf entries can be made use of also. The respondents appears to be taking the case that the life span of coconut tree to be sixty years. The Forest Officer has stated that the average yield of a coconut tree would be 60 to 80 coconuts per year and the cost of cultivation per coconut tree, according to his statement, runs between Rs. 87-to Rs. 10/- per year. The life span of tamarind tree is stated to be 100 to 150 years and it starts yielding fruits after 15 years and its yield will increase year by year. P.W. 2 has stated that cost of cultivation of tamarind tree is nil, but has stated its by product may be used for fuel. P.W. 3 who is a Range Forest Officer has stated the average income of tamarind tree to be Rs. 750/-to Rs. 1,000/- p.a. As regards income from coconut tree and tamarind tree "no doubt", there appears to be some evidence on record. About neam tree, the evidence of plaintiff is that it is in between Rs. 200/- to Rs. 300/- per year which is the income from its seeds and leaves. The District Judge really in this case has applied wrong principles and yard sticks in determining the compensation. The learned counsel for the petitioner also made one more submission that the learned District Judge has illegally refused to grant of payment of interest on the amount of compensation. He submitted that when the trees were cut and no proper compensation has been paid, it became a debt and on that amount, the interest should have been awarded in every case at the Bank rate. But the learned District Judge has illegally refused to do it. Learned counsel submitted that even under the code of Civil Procedure vide Section 34, the Court is given the power to award interest from the date of award till the date of payment on ordinary transactions at the rate of 6% p.a. and on transactions of commercial nature at the bank rate. There appears to be some substance in these contentions. By taking a wrong view that merely because the Act does not provide for interest, the learned Court below illegally refused to consider the question of grant of interest.
Thus considered, instead of myself determining the compensation, I think to set aside the order passed by the learned District Judge and to remand the case to the District Judge, Chitradurga, to assess the compensation on the basis of evidence on record, payable to the revisionist-applicant taking into view the criteria referred to above and if there is any need of further evidence, that may be adduced by both the parties. In case of coconut and tamarind trees, multiplier of something in between 15 to 20 may be applied. In respect of non fruit bearing trees, their utility and potentiality may be taken into consideration in determining their value. The question of gram of interest on the amount of compensation as determined minus the amount already paid may also be considered in the light of Section 34, CPC from the date of claim petition to the date of its payment. Revision, as such, is allowed. The learned District Judge is directed to decide keeping in view the observation made above the matter afresh at the earliest, in every case within a period of maximum six months from the date of communication of this order.
.