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2011 Supreme(Ker) 779
High Court of Kerala
PIUS C. KURIAKOSE & N.K. BALAKRISHNAN
Kerala State Industrial Development Corporation, Thiruvananthapuram, rep. by its Secretary
Versus
The District Collector, Malappuram & Another
LA.App.No. 1427 of 2007 (B) & Cross Objection No. 21 of 2008
Decided on : 18-08-2011
For the Appellant:M.C. Sen, Senior Advocate, Shahna Karthikeyan, Advocates.
For the Respondent:R1 - Latha T. Thankappan, Government Pleader, P. Sanjay & T. Krishnanunni Advocates.
Headnote:
Land Acquisition Act 1894 - Section. 23 - Acquisition of a rocky area - Potentialities for quarrying possessed by the land should be taken into account in assessing market value of land - Matters to be considered - whether owner is entitled to get compensation ? Whether granite quarry was functioning in the property and extraction of granite stones from that property was not started, whether it affects the claim by the claimant ? Whether acquisition of a rock area, whether potentialities for quarrying possessed by land should be taken into account in assessing market value of land ?Whether in case of acquisition of a rocky area, it can be assumed that a willing purchaser who purchases property with the hope of extracting granite would pay the entire amount which can be obtained during a long span of about 25 years, on date of purchase ? Percentage of deduction to be made ? Held, The fact that at present no quarry is there and that the claimant also did not make preparation to have a quarry in the said property, though he had purchased that land so many years back, will not divest the claimant of his right to get compensation based on the value of the quantity of rocks existing therein. Therefore, the contention that since no granite quarry was functioning in the said property and extraction of granite stones from that property was not started cannot in any way affect the claim put forwarded by the claimant - The potentialities for quarrying possessed by the land should be taken into account in assessing the market value of the land. What is to be assessed is the market value of the land taking into consideration the special adaptability of the land for being used as a quarry. The term 'compensation' is used to indicate what constitutes or is regarded as equivalent or recompense for loss or privation. The ultimate basis for determining the market value on the basis of which compensation is payable under S.23 of the Act means, the price that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition, with all its existing advantages, and its potential possibilities when laid out in its most advantageous manner, excluding any advantage due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired. The court in determining the compensation should sit in the armed chair of a willing vendee and determine whether in the given facts and circumstances he would be willing, depending upon the prevailing market conditions, to offer the rates which the Court proposes to determine as a prudent purchaser. It is reasonable to hold that no prudent man would offer that much amount, as determined by the court below, for purchasing that land since for the realisation of the entire profit/income the purchaser may have to wait for more than 20 years. A balance sheet of plus and minus factors may have to be drawn for this purpose and the relevant factors may have to be evaluated as a prudent purchaser would do. When the property is not a quarry at all the fact that a quarry can be operated upon in the acquired land in future provided competent authorities grant licence, permit etc, after clearing all possible objections that may be raised by the neighbouring people, environmentalist etc., is not a justification to assess compensation in respect of acquired land as if there is already a quarry functioning therein or that the acquisition itself was for quarrying purpose. But at the same time while assessing compensation the fact that huge hillock consisting of building rocks and other rocks do exist in the acquired land cannot be overlooked or totally ignored. The possibility of using the rock for quarrying purpose, for blasting and extraction of granites should also be taken into consideration. In assessing the compensation to be paid for such lands it is necessary to estimate the total rock content situated above the surface which can be extracted from the said land but the value of total quantity of rock content cannot be the total value of the amount to be paid at once since for extraction of so much quantity of rock it may take decades together - It cannot be assumed that a willing purchaser who purchases the property with the hope of extracting granite would pay the entire amount which can be obtained during a long span of about 25 years, on the day of purchase. The argument canvassed by the learned counsel for the claimant cannot be accepted as court cannot ignore the advantage of accelerated payment of lump sum amount. The licence required for operating or functioning quarry may have to be renewed periodically. The fact that there would be likelihood of increase in the price of rock also should be duly taken note of - The Cross Objection is dismissed
BALAKRISHNAN, J.
1. The requisitioning authority-K.S.I.D.C, represented by the Secretary, (impleaded as the 2nd respondent in LAR 153/98) has filed this appeal challenging the quantum of compensation determined by the Reference Court. An extent of 1.8894 hectares of land comprised in R.S.No.16/2 and 4.8686 hectares of land in R.S.No.17 of Panacaud village Panacaud block of Malappuram District were acquired for setting up of IGC, Panacaud Block I. The notification u/s 4(1) of the Land Acquisition Act was published on 14.9.1995. The entire property was categorized as block A and block B. For the property, include block ‘A’, the land value was fixed by the Land Acquisition Officer at Rs.4,200/- per cent. For the land categorized and shown in block-B, the land value was fixed at Rs.3,360/- per cent. An amount of Rs.24,74,818/- was awarded by the Land Acquisition Officer as compensation for the land measuring 1.8894 hectares comprised in Sy.No.16/2. A sum of Rs.63,96,487/- was awarded by the L.A. Officers as compensation for the property measuring 4.8686 hectares of land comprised in R.S.No.17. Complaining of inadequacy of compensation the claimant sought for reference u/s 18 of the Land Acquisition Act.
2. By the impugned award the learned Sub Judge refixed the land value at Rs.24,347/-per cent for the rocky area. For the entire remaining area the land value was refixed by the learned sub Judge at Rs.4,200/- per cent. For the granite rocks existing in the area of 9.60 acres the Court below thus redetermined the total value at Rs.2,33,73,520/-. (It was dividing that amount by the extent, namely 960 cents, the land value was determined by the learned Subordinate Judge at Rs.24,347/-.) The method of calculation adopted by the learned Subordinate Judge and the compensation redetermined by the Court are challenged by the requisitioning authority contending that the Court below went wrong in awarding enhanced compensation at the rate of Rs.24,347/- per cent for the rocky area. It is pointed out that all the minerals belonged to the Government and thus the land including rocks belonged to the Government and as such the claimant is not entitled to get compensation for the granite rocks. It is further contended that the Court below overlooked the decisions of this Court and of the Hon’ble Supreme Court that the lands are held in Malabar area by persons under Ryotwari settlements and as such the minerals belonged to the Government. It is also contended that the claimant did not put forward any claim for the minerals before the Land Acquisition Officer for the rocks and as such a specific issue should have been raised by the Court below with regard to the claim for value of granite made by the claimant.
3. A cross objection was filed by the claimant contending that the Court below should have granted Rs.1,000/- per cent more as compensation for the land measuring 7.03 acres of land.
4. Sri. M.C. Sen, learned senior counsel appearing for the appellants/requisitioning authority and Sri. Krishnanunni, learned senior counsel appearing for the claimant and also senior Government Pleader have been heard in this matter.
5. The following points arise for consideration.
(i) Whether the granite rocks existing above the surface level belongs to the owner of the land or did it vest in the Government?
(ii) Whether the claimant is entitled to get compensation for the granite rocks existing in an area of 9.60 acres acquired from his possession?
(iii) Whether the method of calculation adopted by the Court below is correct?
(iv) Whether the compensation redetermined by the Court below is just and reasonable?
(v) Whether the claimant is entitled to get any further amount as compensation?
Points 1 and 2:
6. The first argument advanced by Sri. M.C. Sen, learned senior counsel is that the property is situated in Malappuram District, which was part of the erstwhile Madras State. It was part of the Malabar area. So the persons holding land have
