Supreme Court - Daily Orders
K.Radhakrishnan Etc. Etc. vs Powergrid Corp.Of India Ltd.. on 28 August, 2014
Bench: Ranjana Prakash Desai, N.V. Ramana
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.8319-41 OF 2014
[Arising out of Special Leave Petition (C) Nos.5874-5896 of 2012 ]
K. Radhakrishnan etc. etc. … Appellants
Vs.
Power Grid Corporation of India
Limited & Ors. … Respondents
ORDER
1. Leave granted.
2. The appellants are farmers over whose lands respondent 1 has laid 400 KV electricity transmission lines. The appellants filed a petition under Sections 10 and 16 of the Indian Telegraph Act, 1885 read with Section 51 of the Indian Electricity Act, 1910 for fixing compensation in respect of the fruit bearing trees which were standing on the said land and which were cut for laying the electricity lines by the predecessors of respondent 1. Since the issues involved were the same, the petitions were tried together. The District Court framed the following issues:
Signature Not VerifiedDigitally signed by Gulshan Kumar Arora Date: 2014.10.09 14:26:46 IST Reason:
“1. Whether the petitioner is entitled for compensation which is sought by him? If so how much amount from whom?2
2. What are the reliefs will be granted to the petitioner?”
3. So far as the first issue, namely, whether the appellants are entitled to compensation is concerned, the District Judge observed that the appellants are the owners of the land; that they were cultivating the coconut trees and other fruit bearing trees on the land and that respondent 1 had laid 400 KV electricity transmission lines over the said land in such a manner that beneath the wires there can be no fruitful cultivation. The District Judge, relying upon the material placed before him observed that the coconut trees were 15 years old; that the coconut trees yield coconuts from the age of 5 to 7 years and they will yield coconuts for more than 40 years. Referring to the evidence of the expert witness from the Tamil Nadu Agricultural University, the District Judge observed that apart from this, it is revealed from the expert opinion that the coconut trees yield coconuts for more than 75 years. However, he considered the yielding age of each coconut tree to be 25 years. Thereafter, about the yield of each coconut tree, he observed as under:
“It is revealed from the exhibit B-5 marked by the respondents that each coconut tree will yield 150 coconuts per year and hence it is decided that each coconut tree will yield 150 coconuts per year. It is accepted that per coconut tree price is Rs.4 and a sum of Rs.600/- per year would be 3 given, even after spending a sum of Rs.100/- per year for maintenance and finally a sum of Rs.500/- would be given. It is also decided that a sum of Rs.500/- as income per year and for 25 years the income would be arrived at Rs.12,500/-.”
4. At this stage, it would be advantageous to quote paragraphs 121 and 122 of the order of the District Judge:
“121. It is true as argued by the respondents side, on the intention of the farmers for getting good income, but they have forced to sell the above said land if the financial crisis eradicated and there is no objection, they would not come forward to sell the coconut trees.
122. Hence it is fit to decide the correct compensation as per law, it is fixed the compensation to the tune of Rs.12,500/-
for each coconut tree, but taking into consideration of the natural wastage, it is decided fixed the compensation Rs.5,000/- for each coconut tree.”
5. It is clear from the above that after considering the expert’s evidence the District Judge came to a conclusion that each coconut tree yields 150 coconuts per year. Price of each coconut at the relevant time appears to be Rs.4/- per coconut. Taking that into account, the District Judge came to a conclusion that price of coconut yield of each coconut tree per year would be Rs.600/- (150x4=600). The District Judge deducted maintenance calculated at Rs.100/- per coconut tree and arrived at the price of yield of per coconut tree per year to be Rs.500/- (600-100=500). Though as per 4 the expert’s evidence, the District Judge came to a conclusion that the coconut trees yield coconuts when they become about 5 to 7 years old and continue to yield coconuts for more than 75 years, he came to the conclusion that the coconut trees in question were about 15 years’ old and, therefore, they would yield coconuts for about 25 years. He, therefore, calculated 25 years income of each coconut tree as Rs.12,500/-. However, he opined that natural wastage has to be considered. He, therefore, applied 10 multiplier. Compensation per coconut tree per year was determined as Rs.5,000/- and Rs.7,05,000/- were granted for 141 coconut trees (5000x141=7,05,000).
6. So far as other trees like bamboo trees are concerned, the appellants have no grievance and whatever compensation has been granted to them is accepted by them.
7. Both the appellants as well as respondent 1 approached the High Court. The High Court framed issues as under:
“i) Whether over and above multiplier 8 could be applied for assessing the compensation?
ii) Whether the land owners are entitled to solatium as 5 contemplated under Section 23 of the Land Acquisition Act on the amount assessed?”
8. The High Court affirmed the District Judge’s view that on account of erection of high tension wires over the concerned land, the farmers’ land had fallen into disuse. They cannot derive any income from the land as no cultivation is possible on the land. The High Court observed that the farmers derive their income only from fruit bearing trees and inasmuch as the trees were cut, they will not get any income from the land. Their income from the entire land is lost. The High Court held that the District Judge was right in applying Multiplier method in assessing compensation. In this connection, the High Court inter alia referred to State of Haryana v. Gurcharan Singh1 and Airports Authority of India v. Satyagopal Roy2. The High Court reduced the Multiplier from 10 to 8 and reduced the compensation per coconut tree from Rs.5,000/- to Rs.4,000/-. The High Court observed that the amount assessed by applying the Multiplier need not be reduced on account of diminution of value of land because the diminution value is the entire value of the land. The High Court observed that it is quite obvious that under the high tension wires, no cultivation is now possible on the land. The High 1 (1995) 2 SCC 637 2 (2002) 3 SCC 527 6 Court noted that the land owners were getting income only from the trees; that they were not doing any cultivation and since the trees were cut, they would not get any income. The High Court did not disturb the interest at the rate of 9% awarded by the District Judge because the Multiplier was reduced from 10 to 8.
9. As regards solatium, the High Court observed that since the land of the farmers are not acquired but only used for erecting the high tension wires, no solatium can be awarded to the land owners. The High Court observed that in none of the cases of similar nature relating to Indian Telegraph Act, solatium was awarded by this Court. The High Court, therefore, held that the land owners are not entitled to any solatium.
10. Being aggrieved by this judgment, the land owners are before us. We have heard learned counsel for the appellants and learned counsel for the respondents. Learned counsel for the appellants submitted that the compensation awarded is too meagre and it is not clear as to exactly what method was followed. Counsel submitted that the yielding life of the coconut trees was assessed by the District Judge as more than 40 years as against 75 years stated by the expert witness. 7 Compensation was fixed at the rate of Rs.12,500/- per coconut tree for 25 years. The District Judge by taking into account the natural wastage by applying 10 multiplier fixed compensation of Rs.5,000/- and, based on that, only Rs.7,05,000/- was awarded for total 141 coconut trees, which was further reduced at the stage of revision by the High Court. The High Court reduced the multiplier from 10 to 8. Consequently, compensation was reduced from Rs.5,000/- to Rs.4,000/- for each coconut tree for 25 years. Counsel submitted that the appellants’ land is a fertile land and, if the electricity line would not have been laid, they would have got good income. Counsel submitted that the appellants are unable to cultivate the land; they are unable to dig a well or use other water resources and no buyer would even purchase their land for farming. Counsel submitted that since solatium has not been granted to the appellants, instead of applying the multiplier, the appellants should have been granted the minimised cost of compensation of Rs.500/- per coconut tree for 25 years i.e. Rs.12,500/- per coconut tree and, on that basis, compensation for 141 coconut trees should have been calculated. Counsel submitted that no compensation is awarded for diminution of land. He, therefore, prayed that the suitable compensation may be awarded to the appellants with 9% interest per annum. 8
11. Counsel for the respondents on the other hand submitted that in the application filed by the appellants, there was no prayer for solatium or for diminution of land value. The prayer was only limited to the enhancement of compensation for the trees cut/damaged during erection of transmission line. The District Judge, therefore, rightly concentrated on the appellants’ prayer. Counsel submitted that once Multiplier method is resorted to in valuing the land then once again the market value of the land would not be taken into account. Counsel submitted that sufficient compensation has already been released and, hence, no interference is necessary with the impugned order.
12. After having heard learned counsel, we are of the opinion that these matters deserve to be remitted to the High Court for re-examination of the question of compensation to be awarded for coconut trees.
13. In K.G. Padmanabha Prabhu v. Kerala State Electricity Board & Ors3, this Court was considering a case where electricity lines were laid by cutting trees standing on the land owned by the 3 (1997) 6 SCC 505 9 appellant therein. The High Court had confirmed the compensation for the trees but set aside the determination of the compensation with regard to the diminution of the value of the land. While considering the procedure to be followed in such cases, this Court referred to Notification dated 21/06/1969 issued by the Electricity Board and while approving the procedure adopted by the Electricity Board, observed as under:
“5. The Board has vide Resolution dated July 1, 1992 decided to follow the procedure provided in the Land Acquisition Act and the Land Acquisition Manual for determination of the compensation for trees. It postulates the notice to the owner and powers of entry. marking of the trees as provided in paragraph 13 and then preparation of the valuation statement as provided in paragraph 17 of the Manual and the diminution of the land value on account of the installation of electric lines over private properties as provided n paragraph 30 of the Manual. Accordingly, the award s required to be passed under paragraph 33 of the Manual in that behalf.
6. Pursuant thereto, notice in this behalf was given to the appellant and on the basis thereof, the appellant filed the claim in O.P. Nos. 20/87 and 202 of 1986 before the District Court for determination of the compensation. Thus, it could be seen that the claim has been made by the appellant under section 51 of the Electricity Act, 1910 and section 10 to 16(3).
Section 16(3) of the Indian Telegraph Act reads as under :
"16(3) If any dispute arise concerning the sufficiency of compensation to be paid under section 10, clause (d), it shall, on application for that purpose by either of the disputing parties to the District Judge within whose jurisdiction the 10 property is situate, be determined by him."
7. It would clearly indicate that if any dispute arises between the parties concerning the sufficiency of compensation, they are entitled to lay the claim before the District Court and the District Court is required to determine the compensation since the procedure prescribed under the Manual of the Land Acquisition was adopted by the Electricity Board. The appellant has rightly availed of the procedure as indicated in the petition itself. Thus, the appellant has perfectly followed the procedure prescribed by law and needs no interference.” After observing thus, only for consideration of diminution of value of land having regard to the extent of land, the matter was remitted to the High Court. Therefore, though while laying or erecting transmission lines, land is not acquired by the respondents and the respondents only have user’s right over the land, procedure prescribed under the Land Acquisition Act and Land Acquisition Manual can be followed while granting compensation.
14. In State of Haryana v. Gurcharan Singh 4, this Court held that compensation for land and compensation for fruit bearing trees cannot be determined separately. The compensation is to the value of the acquired land and the market value is to be determined on the basis of yield. Then applying suitable Multiplier, the compensation 4 (1995) 2 SCC 637 11 needs to be awarded and under no circumstances, the Multiplier should be more than 8.
15. In Satyagopal Roy, there was no acquisition of land. By notification issued by Government of India under Section 9-A of the Aircraft Act, 1934, the respondents therein were directed that no building should be constructed or erected or no trees should be planted on their land. The land remained with the respondents. The respondents claimed compensation for cutting of trees. The Guwahati High Court determined compensation for cutting trees by applying the Multiplier of 18 years’ yield. The question before this Court was whether Multiplier applied was justified in view of Gurcharan Singh. This Court held that while evaluating market value of the acquired property, namely, land with building or land with fruit bearing trees standing thereon, value of both is to be determined not as separate unit but as one unit. This Court further held that with regard to fruit bearing trees, their life span including risk factor is also required to be taken into consideration and, hence, yield of trees multiplied by an appropriate Multiplier for its capitalization after taking into consideration all relevant factors would be the basis for determining the compensation. This Court was, however, of the view that there 12 was no reason for the High Court not to follow the decision of this Court in Gurcharan Singh and determine the compensation on the basis of the yield of the trees by applying 8 years’ Multiplier. This Court observed that the High Court had committed error apparent in awarding compensation by adopting 18 years’ Multiplier. However, considering the small amount awarded to the claimants this Court did not interfere with the Multiplier.
16. In Kerala State Electricity Board v. Livisha & Ors.5, this Court was considering a situation where telegraph was installed and electricity lines were laid in exercise of powers under the Telegraph Act, 1885. This Court inter alia considered whether separate compensation can be paid for fruit bearing trees and diminution of value of land over which the lines were drawn. It would be advantageous to quote relevant portions of the said judgment:
“7.………….. The amount of compensation is required to be determined keeping in view the purpose and object of the statute. There cannot be any fixed formula therefore or the other. Although undoubtedly one formula laid down may assist the Board and/or the Reference Court to apply the same, but there cannot be a hard-and-fast rule in this behalf. A fixed formula for determining the amount of compensation although may make the task of the Land Acquisition Officer or the Reference Court easier but in our opinion each case is required to be taken on its own merit. We may hasten to add that the purpose and object of the Act and the methodology 5 (2007) 6 SCC 792 13 laid down therein for the purpose thereof should be the guiding factor……”
10. The situs of the land, the distance between the high voltage electricity line laid thereover, 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 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. 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. …….” The matter was remitted to the High Court to reconsider each case having regard to the fact situation obtaining therein.
17. We find that in the instant case after referring to the above judgments, the High Court has applied the Multiplier method and 14 granted compensation. Reduction of Multiplier from 10 to 8 is also done in light of this Court’s judgments and consequently compensation is reduced per tree from Rs.5,000/- to Rs.4,000/-.
18. What needs to be re-examined is whether the valuation of the coconut trees is correct. The basic submission of the counsel for the appellants is that the yielding age of coconut trees is arbitrarily fixed as 25 years. It is urged that the District Judge came to a conclusion that the coconut trees were 15 years’ old. Then he referred to the expert’s evidence which stated that coconut trees start yielding fruits when they are 5 to 7 years’ old and give yield for 40 years and give yield upto 75 years. It is urged that in the circumstances it is not understood why the coconut trees which were held to be 15 years old would yield coconuts only for 25 years. The High Court has confirmed this exercise. Though we do not want to express any opinion on this, we feel that this question needs to be re-examined by the High Court. The District Judge has followed yield basis and made no reference to diminution of land value obviously because there was no prayer made in that regard in the appellants’ application nor was any submission advanced on the said issue. It is only in revision memo filed in the High Court that points regarding diminution of land 15 value, solatium and interest were urged. As we have already noted after coming to a conclusion that value of entire land is diminished, the High Court on the basis of judgments of this Court, did not grant separate compensation for diminution of value of land because the District Judge has followed yield basis and applied Multiplier. When a categorical finding is recorded by the High Court that there is diminution of value of the entire land, more attention needs to be focussed on this aspect. If the submission of the appellants that the coconut trees are undervalued is accepted, then applying Multiplier to the increased value, the appellants will get more compensation which will have element of increase in diminution of land value also. As stated by this Court in Livisha, for determining compensation there is no fixed formula. There cannot be any hard-and-fast rule. For fruit bearing trees, compensation could be decided on yield basis. The situs of the land, the distance between the high voltage electricity line laid thereover, the extent of the line thereon, whether the high voltage line passes over a small track of land or through middle of the land, the value of the land and other relevant factors will have to be kept in mind for determining the compensation. The fact that owner of the land may lose his right to use the property for the purpose for which the same was meant to be used will also have to be taken into 16 account.
19. It is urged by the appellants that when the solatium has not been granted, instead of applying Multiplier, the District Judge could have granted the minimized cost of compensation of Rs.500/- per coconut tree for 25 years i.e. Rs.12,500/- per tree for 141 trees, which has not been done. It is submitted that in 2009, the respondents have granted compensation to one S. Chinnaswamy on this basis. We make it clear that this statement was made by counsel for the appellants across the bar in this Court and it is vehemently disputed by the respondents. We are, therefore, not taking it into consideration. However, its correctness needs to be ascertained.
20. In the circumstances, we remit the matter to the High Court. The High Court shall after hearing the appellants and the respondents consider the question whether the coconut tees are undervalued in the context of argument that there is diminution of value of entire land and having regard to the fact that the Multiplier method is applied. We make it clear that the remand is only for the limited purpose stated above and the scope of remand shall not be expanded. We leave all questions of law and fact open. Nothing said 17 by us in this judgment should be treated as expression of our opinion on the merits of the case. We also make it clear that the remand is limited to the appellants before us.
21. Needless to say that if the High Court decides to enhance the compensation over and above what the appellants have already received, the difference of amount of compensation shall be paid to the appellants. However, the amount of compensation which is already paid to the appellants should not be further reduced.
22. The appeals are disposed of in the above terms.
……………………………………………..J. (RANJANA PRAKASH DESAI) ……………………………………………..J. (N.V. RAMANA) NEW DELHI, August 28, 2014.
ITEM NO.2 COURT NO.6 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s).
5874-5896/2012
(Arising out of impugned final judgment and order dated 06/04/2011 in CRP No.863/2005, CRP No.864/2005, CRP No.865/2005, CRP No.866/2005, CRP No.867/2005, CRP No.769/2005, CRP No.770/2005,CRP No.771/2005, CRP No.568/2005,CRP No.455/2005, CRP No.456/2005, CRP No.457/2005, CRP No.655/2005, CRP No.2722/2005, CRP No.2723/2005, CRP No.2724/2005, CRP No.2725/2005, CRP No.2726/2005, CRP No.2727/2005, CRP No.2728/2005, CRP No.2729/2005, CRP No.2730/2005 and CRP No.2731/2005 passed by the High Court Of Madras) K.RADHAKRISHNAN ETC. ETC. Petitioner(s) VERSUS POWERGRID CORP.OF INDIA LTD.& ORS. Respondent(s) (with interim relief and office report) Date : 28/08/2014 These petitions were called on for hearing today.
CORAM : HON'BLE MRS. JUSTICE RANJANA PRAKASH DESAI
HON'BLE MR. JUSTICE N.V. RAMANA
For Petitioner(s) Mr. S. Nanda Kumar, Adv.
Ms. Vedanayaki Kiran D., Adv.
Mr. Prateek Gupta, Adv.
Mr. V. N. Raghupathy,Adv.
For Respondent(s) Mr. S.B. Upadhyay, Sr. Adv.
Mr. Pawan Upadhyay, Adv.
Mr. Kaustuv Pathak, Adv.
Ms. Sharmila Upadhyay,Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeals are disposed of in terms of the signed order.
(Gulshan Kumar Arora) (Indu Pokhriyal)
Court Master Court Master
(Signed order is placed on the file)