KERALA STATE ELECTRICITY BOARD v. DAMODHARAN NAIR

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.T.SANKARAN** ## **THURSDAY, THE 1ST DAY OF MARCH 2012/11TH PHALGUNA 1933** ## **CRP.No. 90 of 2008 ( )** **---------------------OP(ELE)NO..232/2003 of II ADDL.DISTRICT COURT, KOZHIKODE -----------------------** **REVISION PETITIONER/RESPONDENT -------------------------------------------------------** **KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, KERALA STATE ELECTRICITY BOARD, PATTOM, THIRUVANANTHAPURAM.** **BY ADVS.SRI. ASOK M.CHERIYAN, SC, KSEB SRI.PULIKOOL ABUBACKER, SC, KSEB** **RESPONDENT/PETITIONER ----------------------------------------** **DAMODHARAN NAIR, S/O.KUNHUNNI NAIR, AGED 66 YEARS, KURUPINTEKANDIYIL HOUSE, P.O.KUNNAMANGALAM, KOZHIKODE TALUK.** **BY ADV.SRI.V.N.RAMESAN NAMBISAN** **THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 01-03-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **sts** ## **K.T.SANKARAN, J. -----------------------------------C.R.P.No.90 of 2008 -------------------------------------Dated this the 01[st] day of March, 2012** ## **ORDER** For drawing 110 KV electric line, the property belonging to the petitioner having an extent of 88 cents was crossed and several yielding trees were cut and removed. Among the trees cut and removed, there were 11 bearing coconut trees, one bearing arecanut tree and 13 yielding pepper vines. No compensation was granted by the Board for diminution of land value. 2. The claimant filed O.P.No.232 of 2003 before the District Court, Kozhikode claiming an enhanced compensation of `4,62,153/-. 3. Before the court below, the claimant was examined as PW.1, Exts.A1 and A2 and C1 and C2 were marked. No oral evidence was adduced on the side of the Board. 4. The court below relying on the decision in **Kumba Amma Vs. KSEB 2000(1) KLT 542** held that the claimants are entitled to an enhanced compensation of `25,603/- for the trees cut, in addition to the compensation already awarded. C.R.P.No.90/2008 : 2 : 5. The learned counsel for the Kerala State Electricity Board submitted that in view of the decision in **Livisha Vs. KSEB 2007(3) KLT (1),** the amount awarded by the court below towards enhanced compensation for tree cutting was not justified. 6. In **K.S.E.B** . v. **Livisha** ((2007) 6 SCC 792 = 2007 (3) KLT 1 (SC)), the Supreme Court referred to the decision of the larger Bench of the High Court in **Kumba Amma** v. **Kerala State Electricity Board** (2000 (1) KLT 542) and the earlier decisions of the Kerala High Court. The Supreme Court held thus: “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. C.R.P.No.90/2008 : 3 : 12. 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. In _Airport Authority_ (supra), it was held:- “14. Hence, in our view, there was no reason for the High Court not to follow the decision rendered by this Court in _Gurucharan Singh's_ case and determine the compensation payable to the respondents on the basis of the yield from the trees by applying 8 years' multiplier. In this view of the matter, in our view, the High Court committed error apparent in awarding compensation adopting the multiplier of 18.” ## 7. In **Kumba Amma** v. **Kerala State Electricity** ## **Board** (2000 (1) KLT 542), the Larger Bench held thus: “44. Next, we have to consider what should be the rate of return to be applied in this case. As mentioned earlier, regarding the rate of return, the only contention C.R.P.No.90/2008 : 4 : raised by the petitioners is that it should be 5% as held in 1961 KLT 238 and not the higher rate as ordered in 1981 KLT 646. Even though reliance was placed by the petitioners on AIR 1988 AP 89 in support of their contention that the principle applied in 1981 KLT 646 was not correct, it is not contended by the petitioners before us that in their case, the rate of return as assessed by Jagannadha Rao, J. in AIR 1988 AP 89 should be applied. The dispute in this case arose when trees standing in petitioners’ property were cut down on 9.9.1980. The respondents have not made available before us any material to show that the real rate of interest in 1980 was something different from 5%. Their only contention based on 1981 KLT 646 is that what is relevant is the prevalent rate of interest which was 10%. This contention we have already rejected, as such rate does not take into account the factor of inflation. Under these circumstances, we hold that the rate of interest to be applied in the present case is 5%. We hasten to add that we should not be understood as having laid down 5% as the real rate of interest for subsequent period. The rate of interest applicable in India has been held as 4% by Jagannadha Rao, J. in AIR 1988 AP 89. 11 years have lapsed after the above judgment. Whether it should be the same rate of return that has to be applied for the period before and after the above judgment or whether a higher or lower rate, is a matter to be decided in appropriate cases where relevant data is available. Till such time, the Board will adopt 5% as rate of return. But, we make it clear that C.R.P.No.90/2008 : 5 : cases finally concluded by decisions of the Court will not be reopened.” 8. After the decision in Kumba Amma's case, the Board has not fixed any rate for the purpose of fixing compensation on annuity basis. However, from the various orders passed in the claims, it is seen that the Board has uniformly adopted 10% even after the decision of the larger Bench in Kumba Amma's case. To that extent, it shows that the Board never cared to follow the larger Bench decision in Kumba Amma's case. ## 9. In **Kumba Amma** v. **Kerala State Electricity** **Board** (2000 (1) KLT 542), the Larger Bench also noticed as to how the real rate of interest is to be computed and it was held thus: “10. Now, we will consider what is meant by ‘real rate of interest’ and its relevance in computation of compensation. Prof. Paul A. Samuelson defines ‘real interest rate’ as the “money interest rate” minus “the percentage price rise”. Thus, if the money rate is 9% and the annual price rise is 7%, then the true real rate of interest is 9 - 7 = 2%. (See Economics, by Paul A. Samuelson, 11th Edn. (International Student Edition) Page 566).” While fixing 10% as the rate of interest, the Board has not C.R.P.No.90/2008 : 6 : taken into account the rate of interest prevailing and the percentage of inflation. In other words, there is no material to indicate that the Board applied its mind and fixed the rate of interest on the basis of the actual data available as on the date of tree cutting. On the other hand, the Board ritualistically followed 10% as the rate of interest, even ignoring the larger Bench decision in Kumba Amma's case. 10. In the Monetary Policy Statement 2010-11 issued by the Reserve Bank of India, it is stated in paragraph 32 thus: “32. Notwithstanding the current inflation scenario, it is important to recognise that in the last decade, the average inflation rate, measured both in terms of WPI and CPI, had moderated to about 5 per cent from the historical trend rate of about 7.5 per cent. Against this background, the conduct of monetary policy will continue to condition and contain perception of inflation in the range of 4.0-4.5 per cent. This will be in line with the medium-term objective of 3.0 per cent inflation consistent with India's broader integration into the global economy.” 11. A learned single Judge of this Court, after referring to the decisions in **Kumba Amma** v. **Kerala State Electricity Board** (2000 (1) KLT 542) and **K.S.E.B** . v. **Livisha** ((2007) 6 SCC 792 = 2007(3) KLT 1 (SC)), held in C.R.P.No.90/2008 : 7 : ## C.R.P.No.892 of 2006 as follows: “5. Perusing the impugned order, it is seen, the Board had assessed the compensation towards the value of trees cut and removed at 10% annuity and the court below taking note of the principles laid down in **Kumba Amma** v. **Kerala State Electricity Board** (2000 (1) KLT 542) passed by this Court, reassessed the compensation payable for fixing such compensation at 5% annuity. I find nothing in the decision rendered by the apex court in _**Livisha's case**_ (supra) to hold that the assessment of the compensation following the principles laid down in _**Kumba Amma's**_ case (supra) cannot be made applicable depending upon the facts and circumstances of the case. The apex court has held that compensation in relation to fruit bearing trees are concerned, the same would depend upon the facts and circumstances of each case. Of course in a case where it is shown that fixation of compensation at 5% annuity would cause prejudice or injury to any of the parties involved depending upon the facts and circumstances in the case, a different yardstick can be applied for. No such special circumstance is made out in the present case to hold that the principles laid down in _**Kumba Amma's**_ case are inapplicable to the case....” C.R.P.No.90/2008 : 8 : 12. The court below granted a sum of `28,000/- as compensation for diminution of land value. It was found that an extent of 35 cents was affected by the drawal of the line. The land value was fixed at a very low amount of `4,000/- per cent of land as against the claim for `30,000/- to `35,000/- per cent of land. The court found that 20% of the market value can be taken as the diminution of land value. Thus the court below found that the claimant is entitled to a sum of `28,000/as compensation for diminution of land value. The amount awarded by the court below is not excessive. 20% of the market value is being given as compensation for diminution of land value in cases where 110 KV lines are drawn. For the aforesaid reasons, I do not find any ground to interfere with the order passed by the court below. The Civil Revision Petition is accordingly dismissed. No order as to costs. ## **K.T.SANKARAN, JUDGE** skj