Sivarama Pillai Purushothaman Nair vs State of Kerala and Others

Pius C. Kuriakose, J.—These appeals preferred by the claimant who complains that the land acquisition reference court did not award him adequate compensation involve questions pertaining to the interpretation, scope and ambit of clauses thirdly and fourthly of Section 23 of the Land Acquisition Act 1894 as amended by Act 68 of 1984. The property under acquisition was a small extent of land together with portion of a larger building belonging to the appellant. Grounds raised in these appeals pertain to the market value of the land as well as the compensation to be awarded for the building which was acquired (the building portion which stood on the land under acquisition) and towards the building portion which remains under the ownership of the appellant even after the acquisition.

Heard Sri. Sathish Ninan, learned counsel for the appellant and Sri. C.R. Shyamkumar, learned senior Government Pleader for the Government in detail. It was fairly conceded at the Bar that the issue regarding the correct market value fixed for the land under acquisition is already decided by this Court by judgment dated 26-1-2012 in LAA. No. 35 of 2012. We notice that under that judgment the value of identical land was re-fixed by us at the rate of Rs. 1,85,300/- per Are. In view of the finality concededly obtained by that judgment to the issue of land value we re-fix the market value of the land under acquisition in these appeals from Rs. 1,53,334/- per Are to Rs. 1,85,300/- per Are.

We find that under the impugned award the learned Subordinate Judge fixed the compensation for the building portion involved in LAR. 37 of 2009 corresponding to LAA. No. 35 of 2012 at Rs. 2,60,400/- thus awarding an enhanced building value of Rs. 1,32,381/-. We also find that in LAR. No. 39 of 2009 corresponding to LAA. No. 73 of 2012 the learned Subordinate Judge similarly re-fixed the market value of the building portion at Rs. 3,39,600/- thus awarding an enhanced compensation of Rs. 1,72,638/- for the above building portion. The re-fixations of the market value of the building under acquisition has been done by the learned Subordinate Judge appreciating the evidence adduced by the parties, particularly Ext. C1 commissioner''s report and Ext. C1(a) report submitted by an expert Engineer who assisted the Commissioner. We find that the above re-fixations which the learned Sub-ordinate Judge made on the recommendations in Exts. C1 and C1(a) have been so made on the basis of the principles laid down by this Court in Bhavani Ramalakshmy Vs. State of Kerala, , and keeping in mind the principles laid down in relevant precedents such as AIR 1939 235 (Privy Council) , AIR 1942 35 (Privy Council) , State of Kerala v. C.L. Palu, 1979 (3) SCC 780 : 1978 ICO 250 and Abdulrahiman Kunju v. State 1954 KLT 798 (T.C. High Court). In the argument also Sri. Sathish Ninan, learned counsel for the appellant had to concede before us that there cannot be any legitimate grievance regarding the sufficiency of the compensation re-fixed by the reference court towards the building portions which were actually acquired.

The learned Subordinate Judge under the impugned awards awarded a sum of Rs. 78,120/- as compensation for injurious affection and damages due to the severance of the acquired portion of the building from the unacquired portion of the building. Similarly a sum of Rs. 1,01,880/- was awarded in LAR. No. 39 of 2009 towards the same head. Before the reference court compensation was claimed by the appellants towards demolition charges for the building portions which were acquired and also towards charges for repairing and strengthening the unacquired portions of the building. The Advocate Commissioner and the expert recommended for awarding substantial amounts towards this head opining that in order to make the unacquired portions of the building stable and usable such amounts will have to be expended. The learned Subordinate Judge, under the impugned award would discard the recommendations in Exts. C1 and C1(a). However, taking the view that the appellant has to be compensated for injurious affection suffered by the unacquired portion of the building as the appellant will not be able to use his building presently as he could previously, fixed the amount of compensation payable towards injurious affection at 30% of the value of the acquired buildings.

Drawing our attention to the judgment of the Mysore High Court in Special Land Acquisition Officer, Mangalore v. Piadade Fernandes, AIR 1973 Mysore 62 Mr. Sathish Ninan argued that when a building or building portion is injuriously affected by an acquisition what the court has to see is whether the building left standing (unacquired) can be utilised by effecting suitable repairs or otherwise. According to him if it is possible to repair and restore the utility of the building standing unacquired then the cost of effecting such repairs together with the actual loss of value on account of the portion acquired would alone afford sufficient compensation. The argument of Mr. C.R. Syamkumar, senior Government Pleader was that the appellant could have exercised his option u/s 49 of the Land Acquisition Act and requested the Government to acquire the unacquired portion of the building also. It was his decision not to exercise the option and to retain the unacquired portion of the building under his ownership. Even the separation of the acquired portion of the building from the unacquired portion was allowed to be done by the appellant himself as desired by him. As it became clear that for answering the contentious issue in this case - the correct compensation which is payable to the appellant on the basis of clause thirdly or fourthly of Section 23 we directed both sides to expatiate their arguments touching clauses thirdly and fourthly of Section 23 further. Accordingly further arguments were addressed before us by Sri. Sathish Ninan and by Sri C.R. Syamkumar, the learned Senior Government Pleader.

The submission of Sri. Satheesh Ninan was that clause thirdly of Section 23 provides for awarding compensation to the owner of the acquired property for the damages sustained by him as a direct result of the severance of the acquired property from his unacquired properties. The damages need not necessarily in respect of unacquired property itself. The argument of Sri. Syamkumar, per contra was that compensation contemplated under clause thirdly is severance compensation and deals with general damages which have been caused to the person on account of severance of the acquired land from his unacquired lands. Clause thirdly according to the learned Government Pleader will permit the owner of the acquired land to claim compensation which will be compensation payable for the acquired land itself and not for the unacquired land. Sri. Syamkumar cited illustrations According to him, the compensation payable under clause fourthly is compensation to be paid in respect of the unacquired portion, for the damages or diminution suffered by the unacquired portion on account of the acquisition.

Having given our anxious consideration to the submissions of Sri. Satheesh Ninan and Sri. Syamkumar we are of the view that clause thirdly of Section 23 covers situations where part of a larger parcel of land or of a building is acquired by severing the same from the unacquired part. The damages to be taken into account shall be damages which result directly from the severance of the acquired property of the claimant from his unacquired property. The damages contemplated is the damages sustained by the owner which may affect value, utility etc. of the unacquired portion which is severed Clause fourthly in our view provides for payment of compensation for damages sustained by the owner of the acquired property on account of the acquisition affecting his other unacquired properties which may be movable or immovable in any other manner (emphasis supplied) or his earnings.

We had occasion to examine to what extent compensation for loss of earnings can be granted under clause fourthly of Section 23 in State of Kerala Vs. A.P. Moidu and Others, and we held therein that compensation for loss of earnings or loss of business contemplated by clause fourthly of Section 23(1) is not the compensation for loss suffered by a businessman who has been deprived of his business premises as a result of acquisition. We also held that the same is not compensation for loss resulting from his inability to secure an equally ideal place for relocating his business or from the fall in his business earnings on account of relocating of the business in another premises not so ideal for business as the premises acquired. We further held that scope of awarding compensation for loss of earnings will be very limited in cases where the acquisition proceeds under the ordinary provisions and while in cases where the acquisition proceeds under the emergency provisions of Section 17 there may be more scope to award compensation.

Essentially clause fourthly of Section 23(1) enables the Reference Court to award compensation to the owner of the acquired property for the damages sustained by him on account of the acquisition injuriously affecting his other property whether it be movable or immovable, in any other manner which means, any manner other than mere severance. The unacquired property if it is immovable need not be a part of the land which was acquired. Loss of road frontage to the unacquired property, loss of access including easement of way, loss of more convenient access, deprivation of other easements, loss of water sources like well, pond etc. on account of the acquisition will be instances covered by clause fourthly.

We must say that clauses thirdly and fourthly of Section 23 often overlap. This is why in many a judicial precedent these two clauses are treated as a package and compensation awarded under these two heads is many often referred to as severance compensation/compensation for injurious affection (see the judgment of the Supreme Court in Balammal and Others Vs. State of Madras and Others, wherein Their Lordships considered the claims under clauses thirdly, fourthly and also sixthly of Section 23(1) as homologous claims). The learned Subordinate Judge under the impugned awards has referred to the compensation which he has awarded in respect of the unacquired portions of the building as compensation for injurious affection and not as severance compensation notwithstanding the fact that the acquired building and the unacquired building together constituted one larger building. The learned Subordinate Judge cannot be blamed as in these cases the severance has resulted in diminution of the value and utility of the unacquired building portion and the damages sustained by the claimant is relatable to even beyond the physical severance between the two portions.

We shall now examine the correctness of the compensation awarded by the learned Subordinate Judge under clauses thirdly and fourthly of Section 23(1). We construe the compensation awarded by the learned Subordinate Judge towards injurious affection as compensation awarded under clauses thirdly and fourthly of Section 23(1). What we find from the impugned award is that after finding that there is necessity to compensate the claimants for injurious affection by paying "some amount as the claimant cannot use the building and the property now as he used it previously" what the learned Subordinate Judge has done is to award 30% of the building value which had been awarded to the appellant for the building portion acquired from his possession. We are unable to approve the above approach of the learned Sub Judge for resolving the issue.

We are not persuaded to adopt the view of the Mysore High Court in Special Land Acquisition Officer, Mangalore Vs. Piadade Fernandes, wherein Their Lordships have stated that if a building is injuriously affected by an acquisition what the court has to see is whether the buildings left standing can be utilized at all by effecting suitable repairs or otherwise and if it is possible to repair and restore the utility of the building the cost of effecting repairs for restoring the utility of the building should be awarded as compensation. Section 49 of the Land Acquisition Act enables the owner to have the whole building acquired when the proposal of the acquiring authority is to acquire only a portion of the building. In the instant case the appellant did not express any desire to have the whole building acquired by the Government obviously for the reason that he realised that the unacquired portion of the building can be utilised by him and more importantly because he wanted to utilise the unacquired portions for his purposes. The amounts recommended in Exts. C1 and C1(a) by the Commissioner and the expert towards repair and restoration charges for the unacquired building will come to almost the full value of a new building. In the present cases as desired by the appellant he was permitted to separate the acquired portions of the building from the unacquired portions in his own interest for securing the unacquired portions of the building from demolition of the acquired portions in a reckless manner. To award to the appellant the full amount recommended in Exts. C1 and C1(a) as charges for repairing and restoring the unacquired portions of the buildings to usable condition will be allowing the appellant to have unjust enrichment at the cost of public exchequer. According to us, whether it be under clause thirdly or fourthly the compensation to be awarded in respect of the unacquired portions of the building cannot be more than reasonable repair charges so that a basic minimum face lift is given to the unacquired portion, in which the appellant on his own volition has decided to continue his business activities.

Compensation for injurious affection coming under clause fourthly is always compensation which is paid in respect of property not under acquisition. When such compensation is granted for value diminution or injurious affection resulting from the acquisition the claimant has got a duty to mitigate the damages, loss and inconvenience by adopting all possible means. In fact the above principle comparable to what is recognised under the explanation to Section 73 of the Contract Act was recognised by the High Court of Bombay in The State of Maharashtra Vs. The Walchandnagar Industries Ltd. . That was a case where on account of the construction of the Ujani Dam a trolley line belonging to the claimant company connecting the company''s premises to Bhigwan railway station extending to 6 kms. through the property which was acquired and 28 kms. outside that property became disrupted. The reference court awarded a substantial amount of Rs. 1,49,85,251/- as compensation for injurious affection for the entire trolley line which had become obsolete. The Division Bench of the Bombay High Court interfered with the above award to a considerable extent and reduced the compensation which had been ordered to be paid towards severance and injurious affection taking the view that the claimant company could have mitigated the loss by laying out alternative trolley line and by adopting other modes. The amounts recommended in Exts. C1 and C1(a) under the description of repair and restoration charges are virtually re-construction charges which cannot be granted. In the absence of acceptable evidence as to the reasonable amount which could be spent by the appellant for making the unacquired buildings usable having regard to its size and measurements a certain amount of guess work was inevitable. The learned Judge fixed 30% of the value of the acquired building as compensation for injurious affection. Fixing a percentage of diminution and awarding compensation for injurious affection may be justified when the unacquired property is land, but not in the present case where the property unacquired is essentially, building portion. We do not approve the method by which compensation for injurious affection was fixed by the learned Subordinate Judge. At the same time we are sure that the amount actually awarded by the learned Subordinate Judge is actually on the lower side. On a reasonable guess estimate we re-fix the amounts payable to the appellant in L.A.A. 35/12 under clauses thirdly and fourthly of Section 23 in respect of the unacquired portion of the building at Rs. 1,04,160/- instead of the sum of Rs. 78,120/- awarded by the Reference Court. Similarly, we re-fix the amount payable to the appellant in LAA. 73/12 at Rs. 1,35,840/- instead of the sum of Rs. 1,01,880/- awarded by the Reference Court. Thus allowing both the appeals the market value of the land in both the appeals is re-fixed at Rs. 1,85,300/- per Are. The appellant in LAA. 35/12 is awarded a total amount of Rs. 1,04,160/- inclusive of the amount already awarded by the Reference Court towards injurious affection. Appellant in LAA. 73/12 is awarded a total amount of Rs. 1,35,840/- inclusive of what is awarded towards injurious affection. The award of the Reference Court towards value of the buildings acquired is confirmed.

Both the appeals are allowed to the above extent. The appellants will be entitled for all statutory benefits otherwise admissible under Sections 23(2), 23(1A) and u/s 28 of the Land Acquisition Act on the total enhanced compensation. It is however clarified that on the compensation amount which is awarded under clauses thirdly and fourthly of Section 23 he will be eligible only for the benefit u/s 28. The appellant will be entitled for proportionate costs in these appeals. Decree copy will be issued to the appellant only after ensuring that the full court fee payable on the appeal memorandum is remitted.