Tessy Luke and others v. Kerala State Housing Board and The Executive Engineer, Kerala State Housing Board, Kottayam Division

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN** **THURSDAY, THE 31[ST] DAY OF MARCH 2022 / 10TH CHAITHRA, 1944** ## **WP(C) NO. 19509 OF 2012** ## **PETITIONER/S:** - **1 TESSY LUKE, AGED 69 YEARS W/O. LATE O.T. JOSEPH, OPPAMTHADATHIL, ETTUMANOOR, KOTTAYAM.** - ***2 SUDHEER JOSEPH, AGED 49 YEARS S/O. LATE O.T. JOSEPH, RESIDING AT PLOT 2P/3P, PHASE-3, PRANEETH NATURES BOUNTY, SHAMBHUPUR, HYDERABAD, PIN-500043.** - **3 SINDHU JOSEPH, AGED 53 YEARS D/O. LATE O.T. JOSEPH, RESIDING VALLIYANTHADATHIL HOUSE, CHUNGAM, CHERUTURUTHI, THRISSUR DISTRICT, KERALA, PIN-679531.** - **4 SUDHA JOSEPH, AGED 47 YEARS D/O. LATE O.T.JOSEPH, RESIDING AT OPPAMTHADATHIL HOUSE, ETTUMANOOR, KOTTAYAM DISTRICT, KERALA, PIN-686631.** - **5 ANU JOSEPH, AGED 37 YEARS W/O. LATE SUDHEESH JOSEPH, S/O. LATE O.T.JOSEPH, RESIDING AT OPPAMTHADATHIL HOUSE, ETTUMANOOR, KOTTAYAM DISTRICT, KERALA, PIN-686631.** - **6 MASTER. GAUTHAM S JOSEPH, AGED 10 YEARS S/O. LATE SUDHEESH JOSEPH, S/O. LATE O.T.JOSEPH, RESIDING AT OPPAMTHADATHIL HOUSE, ETTUMANOOR, KOTTAYAM DISTRICT, KERALA, PIN-686631. REPRESENTED BY HIS MOTHER AND LEGAL GUARDIAN MRS.ANU JOSEPH.** - **7 MISS GEETHANJALI S JOSEPH, AGED 8 YEARS D/O. LATE SUDHEESH JOSEPH, S/O. LATE O.T.JOSEPH, RESIDING AT OPPAMTHADATHIL HOUSE, ETTUMANOOR, KOTTAYAM DISTRICT, KERALA, PIN-686631.** - **REPRESENTED BY HER MOTHER AND LEGAL GUARDIAN MRS. ANU JOSEPH. (*ADDL. P2 TO P7 ARE IMPLEADED AS PER ORDER DATED 17-2-** **WP(C) NO. 19509 OF 2012 ..2..** ## **2022 IN IA 1/2021).** **BY ADVS. PAUL JACOB (P) TINA ALEX THOMAS** ## **RESPONDENT/S:** - **1 KERALA STATE HOUSING BOARD KSHB COMPLEX, PANAMPILLY NAGAR, COCHIN -36, REPRESENTED BY ITS MANAGING DIRECTOR.** **2 THE EXECUTIVE ENGINEER KERALA STATE HOUSING BOARD, KOTTAYAM DIVISIONI, KANJIKUZHY, KOTTAYAM - 686 004.** **BY ADVS. SRI.K.DENNY DEVASSY, SC, K.S.H.B. MANOJ RAMASWAMY SHRI.V.HARISH, SC, KERALA STATE HOUSING BOARD - KSHB** **THIS WRIT PETITION (CIVIL) HAVING BEEN FILED ON 31.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) NO. 19509 OF 2012 ..3..** ## **JUDGMENT** The first petitioner's husband was allotted two plots _viz;_ Nos.203 and 204 under the Gandhi Nagar Housing Accommodation Scheme, Kottayam; a Housing Scheme framed by the Kerala State Housing Board ('Board' for short). Pursuant to the allotment, the first petitioner's husband and the 1[st] respondent Board entered into Ext.P1 agreement dated 11.08.1989 for sale of property whereby the tentative land value for the two properties was fixed at Rs.43,030/-, including the tentative claims for service and other amenities. An amount of Rs. 10757/- was paid and the balance amount of Rs.32272/- with interest at 15% was to be paid to the Board in 36 equated monthly installments. Clause (6) of Ext.P1 agreement reads as follows: “6.It is agreed that the Kerala State Housing **WP(C) NO. 19509 OF 2012 ..4..** Board shall be entitled to refx the fnal land value, and for service and other amenities of property described in the schedule hereto taking into account inter alia the enhanced compensation awarded by Courts and Tribunals, the cost incurred by the Board for prosecuting such proceedings in Courts and Tribunals and also the increased cost of development works and amenities undertaken with respect to the scheme, after a final settlement of account in connection therewith. It is agreed that the decision of the Board in fixing the revised price for each item of the property shall be conclusive and final.” _(emphasis supplied)_ 2. The petitioners state that, after the execution of Ext.P1 agreement, in 1991, the Board re-assessed the whole project costing as the acquisition proceedings for the project had been finalized and price of land had crystallized. Accordingly, the total cost of purchase was re-assessed and reduced and corresponding reduction in installment was given. The first petitioner's husband **WP(C) NO. 19509 OF 2012 ..5..** expired in 2005. The additional petitioners are the legal heirs of the petitioner's husband. It is stated that the first petitioner had remitted the entire amount by 23.02.1994 and as per Ext. P2 remittance details, no further amounts were outstanding from her. However, the respondents refused to execute the sale deed pursuant to Ext. P1 agreement on some pretext or the other. 3. While so, the first petitioner was served with Ext.P3 demand notice dated 28.08.2010 issued by the Executive Engineer of the Board directing her to pay a further amount of Rs.4,14,982/- towards additional cost of land. Ext. P3 is impugned in this writ petition. There is also a prayer for direction to the Board to transfer the plots covered by Ext. P1 to the name of the first petitioner by executing proper sale deed. According to the petitioners, the respondents are demanding the said **WP(C) NO. 19509 OF 2012 ..6..** amount under the pretext of enhanced land value, refixed on account of acquisition proceedings. However, the petitioners contend that, though there were land acquisition references at the instance of the original owners whose lands were acquired for the project, the entire land acquisition reference cases were concluded by the year 1989 and the demand in Ext. P3 towards enhanced land value is illegal and without authority. 4. A counter affidavit is filed by the respondents stating that the land value at the time of allotment was purely tentative and Board is entitled to re-fix the final land value and for service and other amenities of allotted property taking into account the enhanced compensation awarded by Courts, the cost incurred by the Board for prosecuting such proceedings in Courts and Tribunals and also the increased cost of development works and amenities undertaken with **WP(C) NO. 19509 OF 2012 ..7..** respect to the scheme. It is stated that about Rs.1.80 crores had been remitted by the Board towards LAR payments from 1988 to 2003 as per Court orders and cost was as Board decision dated finalised per 11.04.2003. It is also stated that the allottee would be entitled to get the sale deed executed only after paying the amount demanded in Ext. P3 as per the terms of the agreement. It is further stated that there is violation of clause 15 of Ext. P1 agreement inasmuch as the petitioners did not start construction of building in the plot within the time stipulated thereunder. 5. Heard Mr. Paul Jacob, the learned counsel for the petitioners and Sri. Harish Vasudevan, the learned counsel for the respondents. 6. To contend that the land acquisition reference cases in respect of the Housing Scheme were concluded by the year 1989, Sri. Paul Jacob, the learned Counsel **WP(C) NO. 19509 OF 2012 ..8..** for the petitioners brought to my notice the decision of this Court reported in **Grace Joseph** v. **State of Kerala & Others [2006 (2) KLJ 577]** challenging similar demand as in Ext.P3 in respect of plots included in the same scheme, wherein this Court observed :- “Inasmuch as the land owners were not satisfied with the award of the Land Acquisition Officer, the matter as referred to the Additional Sub Judge, Kottayam as LAR No.72 of 1985 and connected - - matters. By 5 9 1989 all the above LAR cases were decided by the concerned court and land value of Rs.4367/- was fixed by the reference court. A copy of the order passed by the reference court has been placed on record as Ext.P5. Even though, the claimants have not preferred any appeal, the frst respondent however preferred appeals against the LAR cases mentioned above, which were disposed of by the court by judgments and the last one of such appeal was disposed of on 27-11-1996. The appeals **WP(C) NO. 19509 OF 2012 ..9..** preferred by the frst respondent were partly allowed, inasmuch as, the court had set aside the interest granted on solatium as well as the additional amount - granted under Section 23(1 A) of the Land Acquisition Act. _“_ _(emphasis supplied)_ 7. The learned Counsel for the petitioners, relying on the said decision submits that, the Board cannot demand any price towards escalation of land costs caused to the Board due to enhancement of compensation as there was no escalation of price after 1989, as by the time, all reference cases stood determined. On the contrary, the appeals preferred by the Board were partly allowed, by setting aside the interest granted on solatium as well as the additional amount granted under Section 23(1-A) of the Land Acquisition Act. Therefore, Sri. Paul contends that, as per Ext. P1 agreement, the Board will be entitled to re- **WP(C) NO. 19509 OF 2012 ..10..** fix the final land value only on the basis of enhanced compensation awarded by Courts and Tribunals and since there is no enhancement of compensation after the execution of Ext. P1, the demand in Ext. P3 claiming enhanced land value is illegal. According to Sri. Paul, Ext. P3 demand has been issued to meet the interest which the Board had to pay for the delay in deposit of the award amount in Court which is not a factor to refix the final land value in terms of clause(6) of Ext.P1 agreement, as only enhanced compensation awarded by Courts and Tribunals can be the basis of re-fixing the land value. 8. Sri.Harish Vasudevan, the learned Standing Counsel for the Board contends that clause (6) of Ext.P1 agreement permits the Board to demand from the allottees enhanced compensation awarded by Courts/Tribunals and the allottees are well aware that **WP(C) NO. 19509 OF 2012 ..11..** they will have to bear the burden of enhanced compensation. He also refers to the last part of clause(6) of Ext.P1 agreement, wherein it is stated that the decision of the Board in fixing the revised price for each item of the property shall be conclusive and final. 9. As per clause (6) of Ext.P1 agreement, it was agreed between the Board and the allottee that the Board shall be entitled to revise the final land value and for service and other amenities of the properties described in the schedule to the agreement, taking into account _inter alia_ the enhanced compensation awarded by Courts and Tribunals; the cost incurred by the Board for prosecuting such proceedings in Courts and Tribunals; and the increased cost of development works and amenities undertaken with respect to the scheme. 10. It is also apposite to note clause (7) of Ext.P1 agreement, which reads as follows: **WP(C) NO. 19509 OF 2012 ..12..** “7. It is expressly agreed between the parties hereto that after the fnalisation of the land value and charges for service and other amenities by the Board the party of the second part shall pay to the Board together with interest at 15% per annum, the diferences between the tentative price fxed therefor and the price fnally fxed by the Board within thirty days of the date of a registered notice demanding the payment thereof or in such quarterly installments over a period not exceeding two years to be determined by the Board.” (emphasis supplied) 11. It is not in dispute that there was no enhancement of compensation after 1989 and all the Land Acquisition References stood determined by 1989. The appeals preferred by the Board were partially allowed and the Court set aside the interest granted on solatium and additional amount granted under Section 23(1-A) of Act and even those proceedings were **WP(C) NO. 19509 OF 2012 ..13..** concluded on 27.11.1996. Therefore, nothing prevented the Board from finalising the land value at least in the year 1996. According to the Board, the land value was finalised only on 11.04.2003. Still, it took more than 7 years for the Board to issue Ext. P3 demand notice claiming the difference between the tentative price and the final price. 12. As per the proviso to Section 34 of the Land Acquisition Act, 1894, if the amount of compensation awarded is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of 15% per annum shall be payable from the date of expiry of the said period. The Board will be liable for interest only till the amount is deposited. If there is any delay or laches on the part of the Board in depositing the compensation, the interest which the Board had to pay for not depositing the **WP(C) NO. 19509 OF 2012 ..14..** award amount within the period stipulated in the Act cannot be shifted to the shoulders of the allottees . The Board cannot charge interest at the rate of 15% per annum on the difference between the tentative price and the price fixed after finalization of compensation. Clause 6 read with clause (7) of Ext.P1 agreement enables the Board to re-fix the land value taking into account the enhanced land value and to collect interest at the rate of 15% per annum on the difference between the tentative price and the price finally fixed. Once compensation is finalised by the Court, the land value has to be finally fixed by the Board taking into account the enhanced compensation awarded by the Courts, the cost incurred by the Board for prosecuting such proceedings in Courts and also the increased cost of development works and amenities undertaken with respect to the scheme. The compensation or the **WP(C) NO. 19509 OF 2012 ..15..** enhanced compensation has to be deposited by the Board within the time stipulated under the Act. If the amount of compensation awarded is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of 15% per annum shall be payable from the date of expiry of the said period. It is to be noted that, in respect of plots included in the same scheme, this Court has found that the actual land value has gone below the tentative value. No appeals were preferred against LAR cases by the persons whose lands were acquired. The Board preferred appeals and the interest granted on solatium as well as the additional amount granted under Section 23(1-A) of the Land Acquisition Act was interfered with and thus there was reduction in compensation awarded. Since there was no enhancement of compensation, the Board cannot invoke the first limb of clause 6 of Ext.P1 **WP(C) NO. 19509 OF 2012 ..16..** agreement. Ext.P1 agreement provides for enhancement of the land value only in the case of enhancement of compensation. The allottees cannot be made liable for the delay on the part of the Board in depositing the compensation or in finalising the land value. Accordingly Ext.P3 is set aside. However, it will be open to the Board, to issue fresh demand pertaining to enhanced cost of development works and amenities, if any, undertaken by the Board with respect to the scheme in terms of clause 6 of Ext. P1 agreement. Such demand notice, if any, shall be issued within a period of two months from the date of receipt of a copy of the judgment. On issuance of fresh demand notice as above, the petitioners shall pay such amount within one month therefrom and the Board shall take necessary steps to execute the sale deed in respect of plot Nos.203 and 204 under the Gandhi Nagar Housing Accommodation **WP(C) NO. 19509 OF 2012 ..17..** Scheme, Kottayam in favour of the petitioners within one month thereafter. In case no demand notice as above is issued, steps shall be taken to execute the sale deed within a period of two months from the date of receipt of a copy of this judgment. The writ petition is disposed of with the above directions. No order as to costs. **Sd/MURALI PURUSHOTHAMAN JUDGE** SB/01/04/2022 **WP(C) NO. 19509 OF 2012 ..18..** ## **APPENDIX OF WP(C) 19509/2012** ## _**PETITIONERS EXHIBITS.**_ **EXT.P1 TRUE COPY OF THE AGREEMENT DATED 11.09.1989 ENTERED INTO BETWEEN THE PETITIONER'S HUSBAND AND THE RESPONDENT** **EXT P2 TRUE COPY OF THE REMITTANCE DETAILS ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** **EXT.P3 TRUE COPY OF THE ORDER DATED 28.08.2010 AND NUMBERED AS EI SP-2039/GHAS** **EXT.P4 TRUE COPY OF THE INFORMATION OBTAINED UNDER THE RTI ACT DATED 3.1.2011 FROM THE 2ND RESPONDENT** **EXT.P5 TRUE COPY OF THE JUDGMENT DTD. 5.12.1989 IN L.A.R 78/85 EXT.P5(A) TRUE COPY OF THE JUDGMENT DTD 25.10.1986 IN L.A.R 73/85 EXT.P5(B) TRUE COPY OF THE JUDGMENT DTD.27.11.96 IN L.A.. 351/92 EXT.P6 TRUE COPY OF THE JUDGMENT DATED 18.02.2010 IN WA 2481 OF 2005** ## _**RESPONDENT EXHIBITS**_ **Exhibit TRUE COPY OF THE REQUEST DATED 09/01/2009 R1(A) SUBMITTED TO THE 2ND RESPONDENT Exhibit TRUE COPY OF THE INTIMATION LETTER DATED R1(B) 20/01/2009 ISSUED BY THE 2ND RESPONDENT Exhibit TRUE COPY OF THE INTIMATION LETTER DATED R1(C) 28/08/2010 SENT TO THE PETITIONER** **WP(C) NO. 19509 OF 2012 ..19..** **Exhibit TRUE COPY OF THE REPLY DATED 20/09/2010 SENT R1(D)` BY THE PETITIONER Exhibit TRUE COPY OF THE RTI APPLICATION DATED R1(E) 20/09/2010 SUBMITTED BY THE PETITIONER Exhibit TRUE COPY OF THE SALE AGREEMENT DATED R1(F) 11/08/1989 Exhibit TRUE COPY OF THE NOTICE DATED 24/04/2000 R1(G) ISSUED BY THE REGIONAL ENGINEER, KERALA STATE HOUSING BOARD Exhibit TRUE COPY OF THE LETTER DATED 07/03/2008 R1(H) ISSUED BY THE 2ND RESPONDENT Exhibit TRUE COPY OF THE HIRE PURCHASE ACCOUNT R1(I) CLOSING STATEMENT AS ON 30/09/2010 Exhibit TRUE COPY OF THE SPLIT UP CALCULATION R1(J) LEADING TO EXHIBIT-P3**