Kerala High Court Stays Govt Order Sanctioning Land Acquisition By State Exempting Land Value From Compensation

A writ petition has been filed before the Kerala High Court challenging the proceedings for land acquisition initiated by a Government Order dated 4th February 2021 by which an administrative sanction has been granted to acquire 102.6 acres of land belonging to the petitioner by merely paying the value of improvements made on the land as compensation. 

Justice Raja Vijayaraghavan V has stayed the operation of the said Government Order and all further proceedings pursuant thereto for four weeks. 

The question that was posed for consideration before the Court was whether land, statutorily exempted under u/s.81, Chapter III of the KLR Act, can be acquired under the LARR Act without paying compensation for the value of the land.

Background of the Case: 

The petitioner is aggrieved by the Order since the State proposed to acquire 102.6 acres of his land, the whole of which is a fully developed and well-maintained coffee plantation, registered with the Coffee Board and belonging to the petitioner company in the title, to establish a Carbon Neutral Coffee Park. 

Senior Advocate Ramesh Babu and Advocate S. Ananthakrishnan represented the petitioner in the matter.

The Order states that only the value of improvements needs to be paid on the ground that the land is excluded as plantation land under Section 81 of the Kerala Land Reforms Act.

However, the plea pointed out that the statutory exemption granted under Section 81(3) of the KLR Act has no bearing and can much less fetter the operation of the provisions of the LARR Act.

It was additionally contended that such conditional grant of Administrative sanction for the acquisition of the petitioner's property without giving land value is illegal, improper, in total violation of the provisions of the LARR Act, Article 14 and 300 A of the Constitution since it was not by authority of law. 

The plea stated that since the State is acquiring title over the petitioner's property along with all incidence by invoking the provisions of the LARR Act, it is legally bound to pay compensation for the land value as provided under S.26 of the Act.

As such, it was urged that the State can acquire the title to the petitioner's land only by paying compensation for land value, and any acquisition otherwise is bad and illegal, since the title of the property is in effect acquired by the State in violation of Article 300 A of the Constitution.

The petitioner, who is the owner of the land and holding right, title, and interest over the same cannot be deprived or denied the land value merely for the reason that the said land is exempted u/s.81 of the KLR Act.

It cannot in any manner affect the ownership right of the petitioner over the land in question merely on the ground that the same is exempted land u/s.81. The plea stated as follows:

"S.81 of the KLR Act does not in any way interrupt the title or ownership of the owner in any manner. Title and ownership over the exempted land is always kept intact and continues with the owner undisturbed. It is never vested in the Government and consequently, there is no divesting." 

Therefore, it was argued that the Government cannot deny the petitioner the land value, merely by stating that it is an exempted land u/s.81 of the KLR Act especially when the same is acquired invoking the provisions of the LARR Act, which act has been enacted on the underlying principle of eminent domain.

That being so, the petitioner is entitled to the land value of the land sought to be acquired, it was asserted.

Similarly, the plea pointed out that neither S.81 nor any provisions of the KLR Act, LARR Act, or any other enactment permits acquisition of land exempted u/s.81 of the KLR Act without payment of land value.

It was also added that the GO has to be set aside since it was against the judgment of the Division Bench requiring the State to honour another GO dated 2nd July 2019 in which the acquisition was not hedged with the rider to pay only the value of improvements.

"To resile from the same without the sanction of the Court would tantamount to contempt and therefore unsustainable in law, " the petition reads. 

On these grounds, the petitioner submitted that the GO so far as it denies compensation for land value as prescribed under the LARR Act for the land proposed to be acquired is illegal, improper, and liable to be interfered with.

It was further argued that the stand that the petitioner is not entitled to compensation for the land acquired upsets the very foundation of the principle of invocation of power by eminent domain.

Elaborating on this argument, the petitioner established that the exercise of power by "eminent domain" encapsulated in LARR Act which is hedged in by the requirement of payment of compensation before deprivation of ownership of property is in no way taken away by the provisions of Section 81 of the KLR Act granting exemption from the ceiling provisions of the Act. 

Among several other arguments, yet another notable one was that the exercise of power by the State while issuing the said Order was a 'colourable exercise of power' since it attempted to acquire the petitioner's property without paying compensation for its title, which is not permitted under law.

Case Title: M/s Chembra Peak Estates Pvt. Ltd. v. State of Kerala & Ors.