Kerala State Electricity Board v. Vatsala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.T.SANKARAN WEDNESDAY, THE 18TH DAY OF JANUARY 2012/28TH POUSHA 1933 ## **CRP.No. 312 of 2008** OP(ELE.) NO.159/2003 OF II ADDL.DISTRICT COURT, PALAKKAD REVISION PETITIONER/RESPONDENT: --------------------------------- KERALA STATE ELECTRICITY BOARD REPRESENTED BY SECRETARY KERALA STATE ELECTRICITY BOARD THIRUVANANTHAPURAM. BY ADVS.SRI.PULIKOOL ABUBACKER, SC, KSEB RESPONDENT: PETITIONER: -------------- VATSALA, AGED 52 YEARS, W/O.RAVEENDRAN K.K.,RESIDING AT NAVODAYA VAVAKKODE.VILAYODI (PO),CHITTOOR TALUK PALAKKAD DISTRICT. BY SRI.T.C.SURESH MENON SRI.JIBU P THOMAS SRI.P.S.APPU THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 18-01-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **I.A.NO.869/2008 IN C.R.P.NO.312/2008** DISMISSED 18/1/2012 SD/- **K.T.SANKARAN, JUDGE** //TRUE COPY// AHZ/ ## **K.T.SANKARAN, J.** ## **------------------------------------------------------** ## **C.R.P. NO. 312 OF 2008 -----------------------------------------------------Dated this the 18[th] day of January 2012** ## **O R D E R** The Kerala State Electricity Board (hereinafter referred to as 'the Board') is aggrieved by the order passed by the Court of the Second Additional District Judge of Palakkad in O.P.(Ele) No.159 of 2003. 2. For drawing Kanjikode-Kollengode 110 KV electric line, trees were cut from the property belonging to the respondent. The Board awarded a compensation of `1,02,008.23 to the respondent. Dissatisfied with the same, the respondent filed the Original Petition before the court below claiming a total compensation of `12,85,000/-. 3. For drawing the electric line, 33 coconut trees, one mango tree and two cashew trees were cut and removed from the property of the claimant. The line was drawn through the property of the claimant for a length of 200 metres. However, no compensation was awarded by the Board on account of diminution of land value. C.R.P. NO.312 OF 2008 :: 2 :: 4. The court below held that for 33 yielding coconut trees, the claimant is entitled to an additional compensation of `73,205.49, over and above the amount awarded by the Board. The court below held that for the mango tree cut, the claimant is entitled to get an additional compensation of `10,256/-. It was held that the claimant is entitled to enhancement of `3,980.95 for the cashew trees. It was also held by the court below that the Board was not justified in deducting from the compensation, a sum of `5,085.56 as the value of the timber of the coconut trees. 5. For fixing the compensation payable on account of cutting of trees, the court below relied on the larger Bench decision of the Kerala High Court in **Kumba Amma** v. **Kerala State Electricity Board** (2000 (1) KLT 542) and 5% interest was taken as the basis for fixing the compensation on annuity basis. 6. The learned counsel appearing for the Board submitted that the decision of the court below is against the dictum laid down by the Supreme Court in **K.S.E.B** . v. **Livisha** ((2007) 6 SCC 792 = 2007(3) KLT 1 (SC). C.R.P. NO.312 OF 2008 :: 3 :: 7. 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. 12. We may, incidentally, refer to a recent decision of this Court in _Land Acquisition Officer,_ C.R.P. NO.312 OF 2008 :: 4 :: _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.” ## 8. In **Kumba Amma** v. **Kerala State Electricity Board** (2000 (1) KLT 542), the Larger Bench held thus: C.R.P. NO.312 OF 2008 :: 5 :: “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 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 ## C.R.P. NO.312 OF 2008 :: 6 :: 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 cases finally concluded by decisions of the Court will not be reopened.” 9. To a query by the Court, the learned counsel appearing for the Board submitted that 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. ## 10. 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: C.R.P. NO.312 OF 2008 :: 7 :: “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 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. 11. 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 C.R.P. NO.312 OF 2008 :: 8 :: 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.” 12. 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.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 ## C.R.P. NO.312 OF 2008 :: 9 :: 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....” 13. I do not find any ground to interfere with the enhancement of compensation awarded by the court below on account of the trees cut. However, the court below went wrong in holding that the Board was not justified in deducting `5,085.56 as the value of the timber in respect of coconut trees and other trees. The reason stated by the court below for arriving at this conclusion is that the claimant did not ask the Board to cut and remove the trees. This is not a correct reasoning for arriving at that conclusion. After cutting the trees, admittedly, the timber was utilized by the respondent/claimant. C.R.P. NO.312 OF 2008 :: 10 :: There is no case that the timber of the coconut tree has no value. The Board was not in error in fixing the value of the timber of 33 coconut trees and other trees at `5,085.56. To that extent, the order passed by the court below is liable to be interfered with. 14. The Board did not grant any compensation on account of diminution of land value. The court below awarded a very meager amount of `10,900/- on this count. The court below found, based on the Commissioner's report, that the electricity line was drawn through the property of the petitioner for a length of 200 metres. It was also found by the court below that for drawing 110 KV electric line, it is necessary to keep a clearance area of a width of 22 metres. After having held so, the court below held that an extent of one acre and nine cents was affected by the drawal of the electric line. However, the court fixed the value of the land only at `1,000/- per cent and held that the rate of diminution would be only 10% of the land value. This finding was arrived at on the basis that for drawing petroleum pipeline, 10% of the value of the land is being given as compensation. The court below was not fully justified in adopting the method of fixation of compensation under the Petroleum and C.R.P. NO.312 OF 2008 :: 11 :: Minerals Pipeline (Acquisition of Right of User in Land) Act, 1962. In the case of petroleum pipeline, the land can be utilized for normal agricultural operations. But it is no so in the case of drawal of overhead electric line. Therefore, the court below was not justified in awarding only a sum of `10,900/- as the compensation for diminution of land value. However, since the claimant has not filed any Revision challenging the order passed by the court below, it is not necessary to interfere with the order passed by the court below in that regard. For the foregoing reasons, the Civil Revision Petition is partly allowed. The Board would be entitled to deduct `5,085.56 as the value of timber. To that extent, the Civil Revision Petition is allowed and a sum of `5,085.56 shall be deducted from the enhanced compensation awarded by the court below. The Civil Revision Petition is dismissed for the rest. ## **(K.T.SANKARAN) Judge** ahz/