Pathiyil Radha v. Kerala State Electricity Board

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.T.SANKARAN MONDAY, THE 6TH DAY OF FEBRUARY 2012/17TH MAGHA 1933 CRP.No. 541 of 2007 ( ) ----------------------OP(ELE.)84/1993 of D.C.& SESSIONS COURT,MANJERI REVISION PETITIONER/RESPONDENT IN OP: --------------------------------------- THE KERALA STATE ELECTRICITY BOARD, REP.BY ITS SECRETARY VAIDYUTHI BHAVANAM THIRUVANANTHAPURAM. BY ADVS.SRI.K.S.ANIL, SC, KSEB SRI. ASOK M.CHERIYAN, SC, KSEB SRI.PULIKOOL ABUBACKER, SC, KSEB RESPONDENT/PETITIONER IN OP: ------------------------------- PATHIYIL RADHA, W/O ACHUTHAN NAIR, PAROL, THACHINGANADAM, MALAPPURAM DISTRICT. R BY SRI.RAJAN KUDUMBATHIL R BY SRI.P.BABU THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 0602-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **K.T.SANKARAN, J. ----------------------------------C.R.P.No.541 of 2007 --------------------------------------Dated this the 06[th] day of February, 2012** ## **ORDER** For drawing Thrissur-Kozhikode 220 K.V. electric line, trees which stood on the property of the respondent were cut and removed. The Kerala State Electricity Board awarded a sum of Rs.14,393/- as compensation for the trees cut. No compensation was granted for diminution of land value. The respondent claimed an enhanced compensation of Rs.37,207/in O.P.(Ele.)No.84 of 1993 on the file of the court of the District Judge of Manjeri. 2. Before the court below, the respondent/claimant was examined as PW.1. On behalf of the Board, no oral evidence was adduced. A Commissioner was appointed to inspect the property who submitted Ext.C1 report and Ext.C2 valuation statement. 3. The court below held, relying on the decision reported in **Kumba Amma Vs. KSEB 2000(1)KLT 542** , that 5% return should be taken for fixing the compensation for the trees cut down. Accordingly, a sum of Rs.10,592/- was C.R.P.No.541/2007 : 2 : granted as enhanced compensation in addition to the amount already awarded. 4. The learned counsel for the petitioner submitted that in the light of the decision of the Supreme Court in **Livisha Vs. KSEB 2007(3) KLT 1 (SC),** the decision in Kumba Amma's case is longer good. 5. 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, A.P. v. Kamandana_ C.R.P.No.541/2007 : 3 : _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.”_ ## 6. 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 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, C.R.P.No.541/2007 : 4 : 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 cases finally concluded by decisions of the Court will not be reopened.” 7. 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 C.R.P.No.541/2007 : 5 : 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. ## 8. 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 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. C.R.P.No.541/2007 : 6 : 9. 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.” 10. 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 C.R.P.No.541/2007 : 7 : 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....” 11. For the aforesaid reasons, I am of the view that the court below has not committed any error in fixing the enhanced compensation at Rs.10,592/- for the trees cut. 12. As regards the compensation for diminution of land value, it was found by the court below, relying on the Commissioner's report that an extent of 20 cents was affected by the drawal of the electricity line. The Commissioner assessed the land value at Rs.3,000/- per cent. However, the court below fixed the land value only at Rs.1,250/-. It was C.R.P.No.541/2007 : 8 : found that 25% of the land value can be taken as the basis for granting compensation for diminution of land value. Accordingly, a sum of Rs.6,250/- was awarded as compensation for diminution of land value. The court below held, based on the data available before the court, that the land in question is situated in an important locality, only about 200 metres away from the public road and 50 metres away from a panchayat road. It was also noticed that by the drawal of the line, the property belonging to the respondent was practically divided into two. The court below took note of the principle of mitigating the damages as well. I am of the view that the amount fixed by the court below as compensation for diminution of land value is just and reasonable and it is in tune with the principles laid down in **K.S.E.B** . v. **Livisha 2007(3) KLT 1 (SC)** . For the aforesaid reasons, I do not find any ground to interfere with the well-considered order passed by the court below. Accordingly, the Civil Revision Petition is dismissed. ## **K.T.SANKARAN, JUDGE** skj