Kerala High Court
The State Of Kerala vs Cadburys India Ltd on 2 April, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
2025:KER:27652
LA.App.Nos.268/19 & 23/21
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA,
1947
LA.APP. NO. 268 OF 2019
AGAINST THE JUDGMENT AND DECREE DATED 19.06.2019 IN
LAR NO.73 OF 2002 OF SUB COURT, SULTHANBATHERY
APPELLANT/CLAIMANT NO.3:
GEORGE POTHAN,
AGED 63 YEARS
S/O LATE P.G.GEORGE, HOPE ESTATE, VELLARIMALA,
VYTHIRI TALUK, WAYANAD DISTRICT-673 121.
BY ADVS.
BIJU ABRAHAM
SRI.B.G.BHASKAR
RESPONDENTS/RESPONDENTS 1& 2 & CLAIMANTS 1 & 2:
1 STATE OF KERALA
REPRESENTED BY DEPUTY COLLECTOR, WAYANAD-673
121.
2 KERALA INDUSTRIAL INFRASTRUCTURE
DEVELOPMENT CORPORATION, VELLARANKODE, WAYANAD-
673 123.
3 M/S CADBURYS INDIA LTD.,
CADBURY'S HOUSE, 19/3 DESAI ROAD, MUMBAI-400026.
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LA.App.Nos.268/19 & 23/21
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4 GENERAL MANAGER,
COCOA OPERATIONS, CADBURY'S INDIA LTD., P.B.NO
17, VADUVATHUR, KOTTAYAM-686 010.
BY ADV.SMT.N.SUDHA DEVI, SPL. GOVERNMENT PLEADER
FOR R1
ADV P.U.SHAILAJAN, SC FOR R2
THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD
ON 19.02.2025, ALONG WITH LA.App..23/2021, THE COURT ON
02.04.2025 DELIVERED THE FOLLOWING:
2025:KER:27652
LA.App.Nos.268/19 & 23/21
3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA,
1947
LA.APP. NO. 23 OF 2021
AGAINST THE JUDGMENT AND DECREE DATED 19.06.2019 IN
LAR NO.73 OF 2002 OF SUB COURT, SULTHANBATHERY
APPELLANT/1ST RESPONDENT:
THE STATE OF KERALA
REP.BY DEPUTY COLLECTOR, WAYANAD
BY ADVS.
SMT.N.SUDHA DEVI, SPECIAL GOVERNMENT PLEADER
(LA)
RESPONDENTS/CLAIMANTS & SUPPLEMENTAL 2ND RESPONDENT IN
LAR:
1 M/S.CADBURYS INDIA LTD.,
CABDURY'S HOUSE, 19-3, DESAI ROAD
2 GENERAL MANAGER
COCOA OPERATIONS, CADBURYS INDIA LTD., PB NO.17,
VADUVATHOOR, KOTTAYAM - 686 010.
3 GEORGE POTHEN
S/O.GEORGE, HOPE ESTATE, VELLARIMALA, VYTHIRI
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LA.App.Nos.268/19 & 23/21
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TALUK, WAYANAD (POWER OF ATTORNEY HOLDER OF SRI.
GEORGE JOHN AND SRI. P.C. MATHEW), PIN - 673 576
4 KERALA INDUSTRICAL INFRASTRUCTURE DEVELOPMENT
CORPORATION, PIN - 673 123
BY ADVS.
SRI.BIJU ABRAHAM FOR R3
SRI.B.G.BHASKAR FOR R3
SRI.P.U.SHAILAJAN, SC FOR R4
THIS LAND ACQUISITION APPEAL HAVING COME UP FOR
HEARING ON 19.02.2025, ALONG WITH LA.App..268/2019, THE
COURT ON 02.04.2025 DELIVERED THE FOLLOWING:
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LA.App.Nos.268/19 & 23/21
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"C.R"
JUDGMENT
[LA.App. Nos.268/2019, 23/2021]
Easwaran S., J.
These appeals arise out of the judgment and decree dated
19.06.2019 in L.A.R No.73/2002 on the files of Sub Court, Sulthan
Bathery. Both the 3rd claimant as well as the State have come up in
appeal.
2. The brief facts necessary for the disposal of the appeals
are as follows:
An extent of 20.25 Hectares (50 Acres) of dry land comprised
in re-survey No.266/3 of Kalpetta Village of Vythiri Taluk was
acquired at the instance of KINFRA for the purpose of establishment
of an Industrial Estate. Section 4(1) notification was issued on
27.1.2000. The award was passed on 30.9.2000 and the land
acquisition officer awarded a total amount of Rs.2,54,31,752/-.
While fixing the land value, the land acquisition officer relied on sale
deed No.1296/1999 dated 14.7.1999 (Ext.R4). However, while fixing
the market value, the land acquisition officer split the property into
two blocks, one having an extent of 1.5535 Hectares, wherein the
land value was fixed at Rs.3,013/- per cent, and for the remaining
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18.6965 Hectares of land, the land acquisition officer adopted the
capitalisation method and awarded a total amount of
Rs.1,85,85,251.16 towards the market value for the entire 20.25
Hectares.
3. Aggrieved by the award passed by the land acquisition
officer, the claimants preferred an application under Section 18 of
the erstwhile Land Acquisition Act, 1894 stating that the land
acquisition officer ought to have adopted a comparative sales
method. In support of his claim, Exts.A1 to A5 documents were
produced and CW1 to CW4 were examined. The respondent/State,
on the other hand, produced Exts.R1 to R14 documents and
examined RW1 in support of their claim. The claimants also sought
compensation under the head severance and injurious affection for
the remaining 67.48 Acres of land in possession since a check dam,
which was constructed inside the 50 Acres of land acquired, was also
taken over in the acquisition proceedings.
4. The reference court on appreciation of evidence found
that the market value fixed by the land acquisition officer is dismally
low and thus proceeded to enhance the market value of the land
acquired. However, the reference court rejected the contention of
the claimants that the land acquisition officer could not have split
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the property into two by adopting the belting system. Discarding the
evidence produced by the claimants, the reference court proceeded
to grant compensation towards severance and injurious affection at
the rate of Rs.500/- per cent for the remaining extent. Aggrieved by
the insufficiency in the grant of compensation, the 3rd claimant has
approached this Court in L.A.App.No.268/2019, while the State has
come up in L.A.App.No.23/2021 aggrieved by the enhancement
granted by the reference court in the market value.
5. Heard Sri.B.G.Bhasker, the learned counsel appearing
for the appellant/3rd claimant and Smt.N.Sudha Devi, the learned
Special Government Pleader (LA) appearing for the State and
Sri.P.U.Shailajan, the learned Standing Counsel appearing for the
requisitioning authority, KINFRA.
Submissions on behalf of the appellant/claimant
6. Sri.B.G.Bhaskar, the learned counsel appearing for the
appellant/3rd claimant raised the following submissions:
(a) The reference court failed to appreciate the true
evidentiary value of Exts.A1, A3 and A4 sale deeds, which were
produced as exemplars. The properties covered under Exts.A1, A3
and A4, though paddy land, were sold to Kalpetta Municipality, which
had expended considerably in order to reclaim the land for the
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purpose of construction of an indoor stadium. At the time of the trialof the reference, the claimants had substantiated the fact that nearly
Rs.9 Lakhs was expended by the Municipality for the purpose of
reclamation, but however, during the pendency of the appeal, in
response to a query under the Right to Information Act, the appellant
received an intimation that the total amount expended by the
Municipality was Rs.43,52,752.28 over an extent of 19500 sq.m.
Therefore, it is the case of the appellant/3rd claimant that the
development cost which was incurred by the Municipality ought to
have been taken into consideration by the reference court while
determining the exact market value of the exemplars.
(b) Equally so, the reference court erred in rejecting the
evidentiary value of Ext.A2 sale deed. Though Ext.A2 sale deed is of
the year 1986, the reference court should have noticed the fact that
an extent of 47 cents was sold for a sum of Rs.4,23,000/- and the
same is in favour of Life Insurance Corporation, which will certainly
add credence to the document. Referring to the report of the
Advocate Commissioner, the learned counsel would further point out
that the property covered by the relied on document is One (1) k.m.
away from the town and the said land cannot be equated with the
land acquired.
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(c) The land acquired was maintained as a demonstrative
estate by M/s.Cadbury’s India Limited with well formed roads,
quarters for staff and also sufficient electric connections for the
purpose of lighting the surroundings.
(d) The claimants despite successful in proving that the
remaining 67.48 Acres of land was rendered useless because of the
acquisition of the 50 Acres, inclusive of the check dam maintained
for the purpose of irrigation of the coffee estate, the reference court
went wrong in discarding the evidence of CW2 and granting only
Rs.500/- per Cent towards the severance compensation.
(e) It is further contended that the land acquisition officer
could not have adopted the belting system and split up the land
acquired into two blocks of 1.5535 Hectares and 18.6935 Hectares
by fixing the land value of Rs.3013/- per cent to the first block and
applying the capitalisation method in respect of the second block for
the purpose of compensation.
(f) The fact that the importance of the land acquired is
proved by the fact that the land acquired abutting the National
Highway, was completely lost sight by the reference court.
(g) Reason for rejection of Ext.A2 sale deed is that the
property mentioned in Ext.A2 is situated within the town. The
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concept of “town” has to be understood as a single word and there
cannot be any further sub-division from the town.
(h) The value reflected in an exemplar for a smaller part can
always be considered for the purpose of arriving at the value of a
larger extent of land sought to be acquired, subject to the exception
that if the land has already been developed, the development
charges will have to be deducted.
(i) Lastly, it is contended that the appeal filed by the State is
not maintainable since the acquisition is for KINFRA and the primary
responsibility to pay the compensation is on the requisitioning
authority.
Submissions on behalf of the State
7. The learned Special Government Pleader (LA),
Smt.N.Sudha Devi, appearing on behalf of the State, the appellant in
L.A.App.No.23/2021, primarily contended that the reference court
went wrong in relying on Exts.A1, A3 and A4 which cannot be
construed as similar documents. She would further submit that the
best evidence available before the reference court was in the form
of Exts.R13 and R14 documents, which are the documents reflecting
purchase of jenmom right by the 3rd claimant. Going by the aforesaid
documents, only Rs.55,000/- is fixed for the 117.48 Acres of land and
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therefore, the reference court exceeded in its jurisdiction by relying
on the other exemplars which ought not to have been taken as best
evidence. It is further submitted that the reference court also erred
in granting severance compensation, especially when no evidence
was adduced by the claimants to prove that they are unable to
cultivate the remaining 67.48 Acres of land. Finally, it is contended
that the reference court ought not to have granted interest for the
period from 2008 to 2015, since the reference proceedings were
stayed by the order of the High Court in WP(C) No.18484 of 2008
and the writ petition was disposed of only on 15.01.2016.
Submissions on behalf of the requisitioning authority
8. Sri.P.U.Shailajan, the learned Standing Counsel
appearing for the requisitioning authority, vehemently opposed the
submissions of Sri.B.G.Bhaskar, the learned counsel appearing for
the appellant/3rd claimant, and pointed out that the claimant had paid
a sum of Rs.2,70,00,000/- for purchase of tenancy right and also
Rs.55,000/- for the purchase of Jenmom right. If the total
consideration is taken, the market value of the land acquired per
cent would come to around Rs.2,303/- per cent. According to him,
the best evidence available is Exts.R13 and R14 sale deeds and,
therefore, the reference court could not have ignored the same and
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granted the compensation as done. Insofar as the severance
compensation is concerned, no evidence had been adduced by the
claimant to prove that the remaining 67.48 Acres of land remains
unutilised. According to the learned counsel, evidence of CW2 could
not be relied on, especially in the absence of any specific finding
entered by the Advocate Commissioner, who filed the report. The
learned counsel would further submit that although the
requisitioning authority has not preferred an appeal, it is entitled to
raise such contentions in order to support the State in their
endeavour to assail the findings of the reference court to prove that
the enhancement granted by the reference court is on a higher side.
9. We have considered the rival submissions raised across
the bar and have perused the records.
Maintainability of the Appeal by the State
10. We deem it appropriate to consider this question at first,
since the entire consideration of the appeal by the State hinges on
the question of its maintainability. According to Sri.B.G. Bhaskar, the
learned counsel for the 3rd claimant, the appeal preferred by the
State is not maintainable for the reason that the acquisition is for a
company. In support of his contention, reliance is placed on the
decision of the Supreme Court in V.N.Krishna Murthy and another
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Vs Ravikumar and others [(2020) 9 SCC 501], wherein the Supreme
Court held that a stranger cannot be permitted to file an appeal in
any proceedings unless he satisfies that he falls within the category
of aggrieved person.
10.1. We have no doubt regarding the principles laid down by
the Supreme Court as above. But the pointed question is whether it
applies to land acquisition proceedings. We are afraid that it will not.
The primary liability to pay compensation for forcible acquisition of
land is on the State, since it invokes the power under eminent
domain. We notice that under the old regime as well as under the
new regime, the primary liability is on the State to pay the
compensation. This principle is reiterated by the Supreme Court in
Ultra Tech Cement Limited Vs Mast Ram and others [(2025) 1 SCC
798]. Therefore, we hold that the appeal preferred by the State is
maintainable and thus answer the point against the claimant.
Evaluation of the submissions of the State
11. Though one cannot dispute the power of the State to
invoke the power of eminent domain to acquire the properties of
private individuals, this Court cannot but notice the fact that 117.48
Acres of land which was being primarily cultivated with coffee was
all on a sudden, sought to be acquired for the purpose of
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establishment of an industrial park at the instance of KINFRA.
Though we have no doubt regarding the public purpose behind the
acquisition, we are slightly surprised with the vehemence with which
the State as well as the requisitioning authority oppose the plea of
the claimant for enhancement, while assailing the findings of the
reference court. It is in this context, we felt that it would be
expedient for us to consider the claim of the State at first instance,
before proceeding with the claim under respective heads for
enhancement at the instance of the claimant.
12. The primary contention raised by the State is that the
best evidence available before the reference court was Exts.R13 and
R14 documents, by which the claimant purchased the property. In
support of this contention, the learned Government Pleader placed
reliance on the decision of the Supreme Court in Special Deputy
Collector v. Kurra Sambasiva Rao [(1997 (6) SCC 41]. The
contention that the reference court ought to have relied on the said
documents instead of the exemplars, at first blush, looks appealing.
However, when we delve deep into this issue, we find the argument
has its own inherent infirmities. Exts.R13 and R14 are the two
registered documents by which the claimant was stated to have
purchased the tenancy right as well as the jenmom right on
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16.01.1998 and 11.10.1999, respectively. Though the requisitioning
authority did not prefer an independent appeal on its behalf, the
learned counsel appearing for the requisitioning authority seriously
attacked the findings of the reference court on an assumption that it
is entitled to raise such contentions in an appeal preferred by the
State, on the ground that the reference court erred egregiously in
not looking into those documents. According to him, the price for
the purchase of jenmam right of 117.48 Acres of land was fixed at
Rs.55,000/-. When this argument was raised, we were primarily
concerned about the question as to whether either the State or the
requisitioning authority had raised the aforesaid argument before
the reference court. Though the learned counsel appearing for the
requisitioning authority asserts before us that the same was raised,
we find that no such argument had been advanced before the
reference court. Be that as it may, in order to find out whether there
is any substance in the argument raised by the learned counsel
appearing for the requisitioning authority, we decided to explore
further into the arguments in detail.
13. The details of purchase of the jenmom right as well as
the tenancy right were no doubt raised in the objection preferred by
requisitioning authority before the reference court. A perusal of the
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objection shows that the requisitioning authority had given the
details regarding the transactions. Therefore, it is admitted that by
the two documents, the tenancy right as well as the jenmom right
were separately purchased by the appellant/claimant No.3. However,
the question would be whether either the State or the requisitioning
authority can raise this question at all.
14. Under the old regime of determination of the
compensation for the land acquired, i.e. the Land Acquisition Act,
1894, we find that under Section 11 thereof, the District Collector is
bound to determine the market value of the land acquired
considering the extent and the nature of the land. Thus, while the
Land Acquisition Officer proceeds to fix the market value he does it
by taking into consideration the documents in respect of similar land
for the said purpose. The sustenance of the argument of the State
will depend as to whether the land acquisition officer took note of
the aforementioned document while fixing the market value. If he
has not, then probably we may have to delve deep into this argument.
On the other hand, if he has considered the document, the further
question would be whether the State can question his wisdom in
these proceedings?
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15. We have bestowed our anxious consideration to the
findings rendered by the land acquisition officer in order to see
whether there was any omission on the part of the land acquisition
officer to consider the documents, Exts.R13 and R14. Surprisingly,
we find that the land acquisition officer after taking note of those
documents, did not deem fit to accept those documents nor to refer
the same while determining the market value of the land acquired.
Therefore, in our considered view, when the land acquisition officer
himself was not satisfied about the genuineness of Exts.R13 and R14
and was clearly of the view that the same did not reflect the true
market value, the State and the requisitioning authority cannot
contend otherwise.
16. When the Land Acquisition Officer did not deem fit to
consider a particular piece of evidence while fixing the market value
and proceeds to fix the market value and aggrieved by the same the
claimant seeks reference under Section 18 of the Land Acquisition
Act and the reference court enhances the market value, can the State
in appeal contend that the value fixed by Land Acquisition Officer is
incorrect? Answer would be an emphatic “No”. If that be so, we find
that the requisitioning authority cannot place itself in a better
pedestal than the State. It must also be remembered that the Land
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Acquisition Officer is not bound to consider an undervalued
document while fixing the compensation. Hence, we are of the view
that the Land Acquisition Officer rightly discarded the title document
while fixing the land value of the acquired land.
17. Although the primary liability is on the State to
compensate the land owner, it is conceded before us that the
requisitioning authority is also an instrumentality of the State. But,
even if we are to assume that the requisitioning authority is an
instrumentality of the State, it has nevertheless used the machinery
of the State for the purpose of acquiring the claimant’s land, and if
it wanted to challenge the findings of the reference court, then it
ought to have preferred a separate appeal and in the absence of the
same, the requisitioning authority cannot raise contentions which
are not raised by the State.
18. The next contention raised before us by the learned
Senior Government Pleader is regarding the value by the reference
court. Though it is contended that the land value fixed by the
reference court is on the higher side, we must notice the fact that
despite having shown the proximity of the land acquired with that of
the National Highway and the availability of other exemplars, the
land acquisition officer chose to rely on a document, which is 7.4 k.m.
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away from the land acquired. We must also equally note that the
claimant was successful in proving that the sale of the basic land by
Ext.R4 document was a distress sale by two age old persons who
were residing in the property with an intention to settle along with
their son. It is in this context, that the evidence of CW3 assumes
significance. On a scrutiny of the oral testimony of CW3, we find
that the State miserably failed to discredit the evidence of CW3 and
thereby leading to an irresistible conclusion that what was projected
by the claimant regarding the value of Ext.R4 document is genuine.
Therefore, we are constrained to hold that the assessment of the
market value by the land acquisition officer with reference to Ext.R4
document is completely wrong, and the reference court rightly found
that the value fixed by the land acquisition officer was dismally low
warranting enhancement.
Evaluation of the submissions of the claimant
19. Once we have found that the market value arrived at by
the land acquisition officer with reference to Ext.R4 document is
wrong, the decision of the reference court to enhance the market
value must necessarily be sustained. However, before finally doing
so, we must take note of certain glaring infirmities pointed out by
the learned counsel appearing for the claimant. According to
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Sri.B.G.Bhasker, the learned counsel for the claimant, the reference
court could not have rejected Ext.A2 document, which is a sale deed
executed in favour of Life Insurance Corporation during the year
1986. No doubt, the learned counsel is justified in contending that
since the purchase is by a statutory corporation, the purchase of the
property must be viewed with due credibility. We are unable to
subscribe to the said contention especially since the sale in favour of
Life Insurance Corporation took place in the year 1986, whereas the
notification for acquisition is of the year 2000. The exemplar for
smaller plots can be applied for the purpose of arriving at market
value of larger tracts of land and there is no absolute rule against
that. However, we cannot remain oblivious of the fact that in the
present case there are other exemplars available and that reliance
on Ext.A2 need be done only if other exemplars are not available.
Accepting the argument of the learned counsel appearing for the
claimant would lead to an incongruousness situation, where an
exemplar executed 14 years ago will have to be considered for the
purpose of arriving at the market value.
20. In General Manager, Oil and Natural Gas Corporation
(ONGC) Limited vs. Rameshbhai Jivanbhai Patel and Another [2008
(14) SCC 745], the Supreme Court held that exemplars beyond five
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years cannot be considered for the purpose of determining the
market value in an acquisition proceeding. Therefore, we do not find
any reason as to why we should interfere with the findings of the
reference court in rejecting Ext.A2 document.
21. However, that may not be the case insofar as Exts.A1, A3
and A4 documents are concerned. The report of the Advocate
Commissioner shows that the property covered by those documents
are situated within an outer perimeter of 1-1.7 k.m. away from
Kalpetta town. The properties covered by Exts.A1, A3 and A4 are
also lies in close proximity to the land acquired. The Advocate
commissioner specifically found that the land acquired is situated
3.7 k.m. away from Kalpetta town. Considering the terrain of the
area and the predominant existence of the plantations, we can
envisage the natural difficulty of the claimant to produce an
exemplar exactly in the nature of the land sought to be acquired. It
is in this context; we must consider the endeavour undertaken by the
reference court to find out the appropriate market value for the
purpose of arriving at a just and equivalent compensation. No doubt,
the reference court found that the property covered under Exts.A1,
A3 and A4 documents are not similar to that of the land acquired,
but we cannot remain oblivious to the peculiar nature of the property
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involved in the acquisition. Though the State contends before us that
the finding of the reference court was that Exts.A1, A3 & A4
documents are not similar in nature and, therefore, it ought to have
rejected the same, we have already found that the land acquisition
officer completely went wrong in taking Ext.R4 document as the
basic land for the purpose of calculating the market value. Therefore,
in the peculiar circumstances, we find that the reference court was
perfectly justified in taking Exts.A1, A3 & A4 as the exemplars.
22. We also find that the exemplars produced in this case is
that of a paddy land and the land acquired is garden land. Therefore,
the question is how do we compare the lands covered by Exts.A1, A3
and A4 and arrive at the market value of the land acquired. While
undertaking the above exercise, we are required to resort to a
certain extent of guesstimation.
Resort to guesstimation
23. The principle of guesstimation is a heuristic device that
enables the court, in the absence of direct evidence and relevant sale
exemplars, to make a reasonable and informed guess or estimation
of the market value of the land under acquisition, and concomitantly
the compensation payable by the appropriate Government. In that
sense, guesstimation hinges on the court’s ability to exercise
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informed judgment and expertise in assessing the market value of
the land, especially when the evidence does not tender a
straightforward answer. (See New Okhla Industrial Development
Authority Vs Harnand Singh (deceased) Through L.R’s [2024 SCC
Online 1691]).
24. Even if the exemplars are not similar in nature, we hold that
by applying the principle of guesstimation and applying circle rate
the appellate court can redetermine the compensation.
25. In Madhukar Vs Vidarbha Irrigation Development
Corporation & Ors [(2022)13 SCC 344], the Supreme Court held that
it is not the nature of land which is determinative of the market value
of the land. The market value must be determined keeping in mind
the proximity of the land acquired to the nearby roads or the
development in the area.
26. In Shabia Muhammed Yusuf Abdul Hamid Mulla (dead) by
L.R’s and others VS Special Land Acquisition Officer and others
[(2012) 7 SCC 595], the Supreme Court laid down several criteria
for determining the market value of the land in an acquisition. We
deem it appropriate to extract paragraph No.16 of the judgment.
“16. We have considered the respective arguments and
carefully perused the record. It is settled law that while
fixing the market value of the acquired land, the Land
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Acquisition Collector is required to keep in mind the
following factors:
(i) Existing geographical situation of the land.
(ii) Existing use of the land.
(iii) Already available advantages, like proximity to
National or State High Way or road and/or developed area.
(iv) Market value of other land situated in the same
locality/village/area or adjacent or very near the acquired
land.”
27. That takes us to the next question. How do we determine
the market value of the land acquired in this case? No doubt, there
is no direct evidence in the form of exact exemplars. The prominence
of the land acquired is brought out in evidence adduced by the
claimant. At the same time, the non-comparability of the land
covered by the basic document is clearly established by the report of
the Advocate Commissioner, wherein it is stated that the said land is
situated 7.4 k.m. away from the land acquired. That leaves us with
Exts.A1, A3 and A4 documents. Admittedly, the land covered by these
documents are paddy land. Of course, after purchase, it was
reclaimed by the Municipality and an indoor stadium was
constructed. Thus, the commercial importance of the land covered
by the exemplars stood proved beyond doubt.
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28. In Lalchand Vs Union of India & Anr [AIR 2010 SC 170],
the Supreme Court considered the question of determining the value
of agriculture land by taking the garden land as exemplar and
applying a deduction of 25% to 40%. We see no reason as to why the
principle cannot be applied conversely to determine the value of the
garden land, when the only available exemplar before the court is
that of a paddy land. Therefore, we find that interest of justice would
subserve, if we apply an escalation of 25% on the value of the land
as reflected in Exts.A1, A3 and A4. Though the learned counsel
appearing for the appellant/claimant strenuously contended that
while determining the market value of the land covered by Exts.A1,
A3 & A4, due weightage has to be given to the development cost
which was incurred by the Municipality for the purpose of
reclamation of the land, we are unable to agree with the said
contention for the reason that whatever steps undertaken by the
vendor after purchase of the land to enhance its value cannot be the
basis of determination of the market value of the land as on the date
of purchase and, therefore, we have no hesitation to reject the
aforesaid argument.
29. The land value as reflected from Exts.A1, A3 and A4
documents is Rs.7,400/- per cent. The records further reveal that
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26
the documents were executed in the year 1998, whereas the
acquisition proceedings were in the year 2000. The exact period
between the date of execution of Exts.A1, A3 &A4 and that of Section
4(1) notification is 1½ years and, therefore, we deem it appropriate
to take a two-year period for escalation for the purpose of
determining the market value, which we arrive as thus:
7400+ (7400×25%) for 2 years = 12,138.02
(rounded to Rs.12,140/-).
Adoption of belting system
30. In Andra Pradesh Industrial Infrastructure Corporation
Ltd Vs G. Mohan Reddy [(2010) 15 SCC 412], the Supreme Court
held that belting system is permissible only when the land in
different survey numbers and in different locations belonging to
different owners are acquired.
31. In Besco Limited v. State of Haryana [2023 SCC OnLine
SC 1071], Supreme Court while considering the principle of adopting
belting system held as follows.
“24. The subject lands are acquired under one
notification and the plan brought on record evidences
the location and proximity to development in and
around the acquired land. The belting of area for
valuation would be incorrect. We reject the argument
of the State. Since we have not applied incremental
2025:KER:27652LA.App.Nos.268/19 & 23/21
27
value on the exemplar, we deem it just to determine
uniform market value to the lands under acquisition.”
32. In State of Kerala and Others v. Sarasamma and Others
[L.A.App.Nos.558/2022 & conn. dated 12.2.2025 : 2025 KLT OnLine
1308] following the principles laid down by the Supreme Court in the
aforesaid decisions, this Court held that if the land acquired are lying
contiguously and are acquired for the same purpose under same
notification, the land owners will certainly be discriminated if the
land value is fixed by adopting belting system, and that therefore,
the land acquisition officer as well as the reference court could not
have adopted the belting system.
33. Applying the principles laid down as above, we find that
the belting system adopted by the Land Acquisition officer is
unsustainable. We cannot remain oblivious of the fact that 50 Acres
out of the 117.48 Acres of land, having a well-built Check-Dam for
the purpose of retention of water to be used through sprinkler
system for the purpose of irrigating the entire 117.48 Acres, was
acquired for the purpose of establishment of an industrial park. The
requisitioning authority must provide continuous water supply to the
industries, which are sought to be established by the grant of lease
of the plots dividing the land acquired having an extent of 50 Acres
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28
and it is precisely for that purpose that the Check-Dam was also
acquired. Land acquisition officer decided to split up the land into
two blocks, 10 Acres and 40 Acres. While the land acquisition officer
fixed Rs.3,013/- per Cent for the 10 Acres, he adopted the
capitalisation method for the other 40 Acres for the purpose of
determination of compensation. We fail to see the rationale behind
such adoption. We find that a splitting up would deprive the claimant
of a just and fair compensation for the land acquired. Coming to the
findings of the reference court regarding the adoption of the belting
system, the reasoning given by the reference court does not find
support of law. A close reading of the findings of the reference court
as regards the adoption of the belting system, we find that the only
reason given by the reference court was that considering the lay out
of the land splitting it up into two sections of 10 Acres and 40 Acres
is just and proper. The reference court also found that the
availability of internal road is a good ground to hold that the back
belt of the land is also suitable for the proposed purpose. But the
court held that there will be no willing buyer in an open market who
would prepare to purchase the land abutting the road and the land
beneath the road at the same rate. Such dichotomous finding cannot
be appreciated. No doubt, the entire extent of the land is not
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29
abutting the highway, but since it is having a larger extent, the
portion near the highway may not have the same benefit of those
portions internally. But we cannot ignore the compelling fact that
the reference court had found that there is well built and maintained
internal roads in the coffee plantation. Therefore, considering the
facts in a wholesome perspective, we hold that the findings of the
reference court upholding the belting system adopted by the land
acquisition officer is clearly erroneous and is liable to be set aside.
Entitlement for severance compensation
34. The entitlement for severance compensation or injurious
affection is contained under Section 23(1) of the erstwhile Land
Acquisition Act 1894, which reads as under :
“23. Matters to be considered in determining
compensation.
(1) In determining the amount or compensation to be
awarded for land acquired under this Act, the
Court shall take into consideration-
first, the market-value of the land at the date of the
publication of the notification under section 4, sub-
section (1);
secondly, the damage sustained by the person
interested, by reason of the taking of any standing crops
or trees which may be on the land at the time of the
Collector’s taking possession thereof;
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30
thirdly, the damage (if any) sustained by the person
interested, at the time of the Collector’s taking
possession of the land, by reason of severing such land
from his other land;
fourthly, the damage (if any) sustained by the person
interested, at the time of the Collector’s taking
possession of the land, by reason of the acquisition
injuriously affecting his other property, movable or
immovable, in any other manner, or his earnings;
fifthly, if, in consequence of the acquisition of the land
by the Collector, the person interested is compelled to
change his residence or place of business, the
reasonable expenses (if any) incidental to such change,
and
sixthly, the damage (if any) bona fide resulting from
diminution of the profits of the land between the time of
the publication of the declaration under section 6 and
the time of the Collector’s taking possession of the land.”
The third and fourth clauses provide for compensation for severance
of land and for injurious affection. The severance compensation is
granted for the severance of the unacquired land from that of the
land acquired while injurious affection is granted as compensation
for the damages sustained by the claimant at the time of the
Collector taking possession. The entitlement of severance
compensation has to be judged in the context of the loss sustained
2025:KER:27652
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31
by the claimant as a result of the acquisition. It has come out in
evidence that the land acquired having an extent of 50 Acres was
inclusive of a Check-Dam. There need not be an opinion of an expert
to appreciate the perennial problems faced in maintaining a
plantation in respect of coffee and other hill produces. But still the
claimant adduced evidence in the form of CW2, who was an expert
in agriculture. The reference court simply discarded the evidence
on the ground that he is an interested testimony. However, we must
note that neither the requisitioning authority nor the State chose to
adduce contra evidence to that of CW2. When the evidence of CW2
is closely analysed, we find that the plantation which was owned by
the appellant/claimant was having a sprinkler system for the purpose
of irrigating the same and the water was derived from the Check-
Dam which was built inside the 50 Acres of the land acquired. The
presence of the Check-Dam is an irresistible conclusion that the
water retained in it was meant for irrigating the entire 117.48 Acres.
35. In Walchandnagar Industries VS State of Maharashtra
and another (2022) 5 SCC 71, the Supreme Court considered the
parameters for the grant of severance compensation and held that
the benefit under the third clause of Section 23(1) of the Land
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LA.App.Nos.268/19 & 23/21
32
Acquisition Act 1898 cannot be read in isolation with that of the
fourth clause. Both the clauses have to be read together.
36. However, we must note that while determining the
compensation under clause thirdly and fourthly of Section 23(1) of
the Land Acquisition Act 1894, there is no definite guidelines.
Compensation can go up to 50-60% of the amount fixed by the court
as market value. Be that as it may, on facts we feel that since the
remaining extent of land affected due to the acquisition being 67.48
Acres, it may not be expedient in granting severance compensation
up to 60%. It must be remembered that in such cases the
determination becomes purely factual depending upon the evidence
adduced by the claimant to prove the entitlement of the severance
compensation and injurious affection. In the present case, evidence
discussed by us clearly shows that the claimant was successful in
adducing evidence regarding the severance of the property. Hence,
we are of the view that in such cases the courts can always grant
severance compensation on a reasonable basis. In the present case
we feel the claimant is entitled up to 30% of the land value as
severance compensation/injurious affection. This is more so when we
take into account the fact that due to the acquisition the appellant
was unable to continue with the plantation.
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LA.App.Nos.268/19 & 23/21
33
Entitlement for Interest for the delay in disposal of the reference
case?
37. It is vehemently contended by Smt.Sudhadevi, the
learned Senior Government Pleader for the State, and Sri
P.U.Shailajan, the learned Counsel for requisition authority, that the
reference court erred in granting interest for the period of 8 years
when the reference case was stayed by the High Court. We must
notice that in the year 2008 certain third parties sought impleadment
in the reference case and that the court had permitted the third
parties to implead in the reference case which is impermissible
under law. The said order was challenged by the claimant in WP(C)
No.18484 of 2008 and by Judgment dated 15.1.2016, the Single
Bench of this court authored by one of us {Justice Dr.A.K.
Jayashankar Nambiar} allowed the writ petition setting aside the
orders of the reference court. During the pendency of the writ
petition, this Court had stayed the proceedings before the reference
court. It is the specific case of the State that due to the order of stay,
the claimant is not entitled to get interest from 2008 to 2016. We
find that the said contention is wholly untenable since this Court had
not stayed the land acquisition proceedings in the said writ petition.
To ascertain the said fact, we called for the Judges Papers relating to
WP(C) No.18484 of 2008 and found that the interim relief sought for
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LA.App.Nos.268/19 & 23/21
34
by the claimant was against the proceedings of the reference court
alone. The claimant was thus clearly not in fault for the delay caused
in the disposal of the writ petition. Still further, we find that the
reference court had passed the order for impleadment without any
authority of law, thus causing the claimant to approach this Court
with the writ petition. Therefore, we are of the view that the claimant
was at not fault. Moreover, it is now settled that the act of the court
shall not prejudice the party – actus curiae neminem gravabit,”.
Therefore, we find no substance in the argument and, hence, we
reject the same.
Conclusion
38. As an upshot of these discussions, we are of the view that
there is no merit in the appeal preferred by the State. Accordingly,
we dismiss L.A.App.No.23/2021 preferred by the State. As a
necessary corollary, we find that the claimant is entitled to succeed
in his appeal. Accordingly, we allow L.A.App.No.268/2019 and re-fix
the land value at Rs.12,140/- per cent. The appellant/claimant will
be entitled to all statutory benefits flowing out of the said fixation
together with proportionate cost in the appeal. In addition to that,
the claimant will also be entitled to get 30% of the total land value
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35
towards severance compensation for the remaining 67.48 Acres of
land.
Ordered accordingly.
Sd/-
DR.A.K.JAYASANKARAN NAMBIAR,
JUDGE
Sd/-
EASWARAN S.,
JUDGE
jg
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LA.App.Nos.268/19 & 23/21
36
APPENDIX OF LA.APP. 23/2021
RESPONDENT ANNEXURES
Annexure 1 CERTIFIED COPY OF THE JUDGMENT IN
W.P(C)NO.18484 OF 2008 DATED 15.1.2016
OF THIS HON’BLE COURT
2025:KER:27652
LA.App.Nos.268/19 & 23/21
37
APPENDIX OF LA.APP. 268/2019
PETITIONER ANNEXURES
Annexure A1 A TRUE COPY OF THE APPLICATION
SUBMITTED UNDER RIGHT TO INFORMATION
ACT TO THE PUBLIC INFORMATION OFFICER,
KALPETTA MUNICIPALITY DATED 05-08-2022
Annexure A2 A TRUE COPY OF THE DIRECTION GIVEN BY
THE SECRETARY TO STATE PUBLIC
INFORMATION OFFICE, DISTRICT SPORTS
COUNCIL, WAYANAD DATED 01-09-2022
Annexure A3 A TRUE COPY OF THE INFORMATION
RECEIVED BY THE PETITIONER THROUGH HIS
EMPLOYEE NOUSHAD FROM THE INFORMATION
OFFICER OF WAYANAD DISTRICT SPORTS
COUNCIL DATED 17-10-2022
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