Lamin Mohd Yunus J:

[1] The plaintiff company in this case obtained a 25 year lease from the defendant company over two lots of land held under CT 4896 and CT 4897, Lots 4292 and 4293 Mukim of Kuala Kuantan. In cl 5 of the lease agreement a provision was made for the apportionment of compensation monies, should the said lands be compulsorily acquired. Clause 5 of the said lease agreement reads:

Clause 5:

It is further agreed and declared that if the Government or other competent authorities shall at any time during the term hereby created acquire the said lands or any part thereof compulsorily, the award or compensation payable in respect thereof shall be apportioned paid to and received by the parties hereto in the following manner:

[2] Subsequently the said lands were compulsorily acquired by the acquiring authority in pursuance of the provisions of the Land Acquisition Act 1960. Awards were made and the compensation monies apportioned and were paid by the acquiring authority on the 50% - 50% basis as between the plaintiff and the defendant.

[3] The said lease agreement commenced on 1 January 1977. For the purpose of the acquisition the lands were gazetted under s 8 on 23 October 1981. The enquiry to determine the amount of the award was held on 29 October 1982. The award was offered by way of service of Form H dated 3 December 1982.

[4] The plaintiff company is seeking the determination of this Court as to when the said lands were deemed to have been acquired.

[5] Under the law the State Authority has the right to acquire any land which is needed for any of the purposes as laid down in s 3 of the Land Acquisition Act 1960. Under the Act, to initiate the process of acquisition, it is normally preceded by two gazette notifications, one under s 4 and the other under s 8. The notification under s 4 is really a form of notice to the public at large that certain land in a particular locality in the State "is likely to be needed" for any of the purposes referred to in s 3 and with that preliminary investigation and survey of the said land will commence (s 5). Certainly at this point the State Authority has not acquired the land yet for it is still at the state of survey and investigation.

[6] Under s 8 when the State Authority "decides" that any of the lands referred to in Form C "are needed", a declaration in Form D shall be published in the gazette. Subsection (3) of s 8 states a "declaration" in Form D shall be "conclusive evidence" that all the scheduled land referred to in the said form "are needed" for the purpose specified therein. Upon publication of the declaration in Form D, the Collector shall then cause the areas "affected by the acquisition" to be marked out upon the land (s 9(1)(a)) and the Collector shall make a note of the "intended acquisition" (s 9(1)(b)) upon the appropriate register. Having done all that, the Collector shall "commence proceedings for the acquisition of the land" by giving public notice in Form E which states that an inquiry to hear "all claims to compensation" will be heard on a day fixed (s 10(1)). On the appointed date, the Collector shall make full inquiry into the value of all scheduled lands and then assess the amount of compensation in respect of each case (s 12). At the end of the inquiry the Collector will have to prepare a written award and then offer the award by serving it on each person interested in Form H (s 16(1)).

[7] Now it may be observed that the gazette notification made under s 4 unlike that made under s 8 is not followed by an inquiry and assessment of compensation and finally the offer of the award. It is only to inform the public at large that lands in a particular locality as named are "likely to be needed" and as such only investigations and survey will be carried out including other preliminary works as stipulated in Form B. It is a stage when the State Authority has not finally decided whether all those lands or part of them "are needed".

[8] The assessment of compensa