Siti Norma Yaakob JCA:

These two appeals were heard together as they arose from the same proceedings under s. 38 of the Land Acquisition Act 1960 ("the Act"), where the appellants' complaints that the amount of compensation awarded to them by the land administrator, Seberang Perai Tengah, Bukit Mertajam was inadequate, were rejected by the High Court. In appealing against the High Court decision, the appellants filed separate notices of appeal and upon registration, two files were opened and two civil appeal numbers alloted to them.

The acquisition of the scheduled lands was gazetted under s. 8 of the Acton 6 June 1991, and the purpose of the acquisition is stated to be for a public purpose namely industrial and development. The scheduled lands are made up of three lots described as Lots 720, 787 and 794, all in Mukim 13, Bukit Mertajam. The total area acquired from the three lots amounted to 712.045 acres, which is made up as follows:

(1)84.4054 acres came from Lot 720, for which a compensation of RM44,000 per acre or RM1 per sq. foot was awarded as compensation.

(2)321.3750 acres came from Lot 787, for which $28,000 per acre or

RM0.65 sen per sq. foot was awarded as compensation and

(3)315.8750 acres came from Lot 794 for which RM30,000 per acre or RM0.68 sen per sq. foot was awarded as compensation.

The High Court agreed with the amounts awarded by the land administrator, dismissed the appellants' reference, forfeited the deposits made by them but made no order as to costs.

Before us, the appellants attacked the judge's findings based on the following grounds. 1. That the judge erred when he failed to consider the principle that even though the scheduled lands are estate lands, they must be valued for their industrial potential.

2.That both the land administrator and the learned judge erred when they valued the scheduled lands separately and individually and not as a whole.

In response to the first objection, the state legal adviser, Penang, who represented the respondent in both appeals, relied on the provisions of para. 3(e) of the First Scheduleto the Act which deal with matters to be neglected in determining compensation. The particular paragraph contains the following provisions.

In determining the amount of compensation to be awarded for any scheduled land acquired under this Act the following matters shall not be taken into consideration:

(a) ...

(b) ...

(c) ...

(d) ...

(e) any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired.

It is the respondent's contention that the failure to value the industrial potential of the scheduled lands was very much in keeping with the provisions of para. 3(e), and as such was in order.

We could not agree with such a contention as there is no evidence as to the specific use or specific development that the state authority intends for the scheduled lands. All that we have on record is the gazette notification that declares the purpose for which the scheduled lands were acquired to be for a public purpose namely industrial and development, a purpose that is authorised by s. 3(1)(a) of the Act. For the determination of compensation, we consider that the general purpose of such acquisition to be quite a different matter as to the specific use or specific development the scheduled lands are put to upon acquisition. The state authority may well have some grandiose plans as to how the scheduled lands are to be developed with a view to enhancing their value and it is this anticipated enhanced value that para. 3(e) of the First Scheduleseeks to discount when determining the market value of the scheduled lands. That paragraph we say does not do away with the principle that for the purpose of compensating the parties whose lands have been acquired, the potential industrial value of the lands acquired can be taken into consideration when determining the quantum of compensation to be awarded. Potentialities and realities are qui