Kerala High Court

Vazhavalappil Krishnan vs The Special. Tahsildar (L.A.) on 10 October, 2024

                                                      2024:KER:74811
L.A.A.No.289/2013               1


             IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

                THE HONOURABLE MR. JUSTICE G.GIRISH

  THURSDAY, THE 10TH DAY OF OCTOBER 2024 / 18TH ASWINA, 1946

                     LA.APP. NO. 289 OF 2013

         THE JUDGMENT AND DECREE DATED 31.08.2010 IN LAR NO.18

OF 2005 OF SUB COURT, HOSDRUG

APPELLANTS/CLAIMANTS:

     1       VAZHAVALAPPIL KRISHNAN
             S/O.KANNAN.

     2       KRINKA RAMANI WO.KRISHNAN BOTH ARE RESIDING AT
             CHATHAMATH
             PEROLE VILLAGE, PALLIKKARA P.O., NILESHWAR,KASARAGOD.


             BY ADV SRI.KODOTH SREEDHARAN

RESPONDENTS/RESPONDENTS:

     1       THE SPECIAL. TAHSILDAR (L.A.)
             KANNUR - 670 543.

     2       THE DISTRICT COLLECTOR KASARAGOD - 671502.


     3       THE EXECUTIVE ENGINEER N.H DIVISION KANNUR - 670542.

             SMT.SUDHA DEVI, SPL.GP

     THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD
ON 04.10.2024, THE COURT ON 10.10.2024 DELIVERED THE
FOLLOWING:
                                                     2024:KER:74811
L.A.A.No.289/2013               2


                           G.GIRISH, J.
                           ---------------
                      L.A.A.No.289 of 2013
                   ------------------------------
           Dated this the 10th day of October, 2024
            --------------------------------------------

                        JUDGMENT

The claimants in L.A.R.No.18/2005 of the Subordinate

Court, Hosdurg have filed this appeal aggrieved by the refusal

of the said court to award enhanced value of compensation for

the structures demolished from their property in connection

with the acquisition proceedings.

2. An extent of 0.0216 hectare of land and the

structures including residential house, well etc. comprised in

Sy.No.733/1A of Perole Village were acquired for the purpose

of construction of railway overbridge approach road to

Pallikkara gate. The Acquisition Officer awarded a total

compensation of Rs.6,99,339/- as per the award dated

29.05.2004. Out of the above amount, the value of the

structures was computed as Rs.4,48,105/-. In the reference,

the learned Sub Judge allowed enhancement of land value @ 2024:KER:74811

Rs.30,000/- per cent, but declined to award any enhanced

value for the structures situated in the acquired property. The

present appeal is directed against the above refusal of the

Reference Court to enhance the value of the structures

situated in the acquired property.

3. In the impugned judgment dated 31.08.2010 in

L.A.R.No.18/2005, the learned Sub Judge observed that the

claimants failed to adduce sufficient evidence in support of

their claim for enhanced compensation for the structures

situated in the acquired property. Referring to the commission

report and valuation statement marked as Exts.A8 and A8(a),

the learned Sub Judge stated in the impugned judgment that

the Advocate Commissioner who was examined as AW2 was

not able to throw much light upon the details of the

constructions and that the claimants failed to examine the

Private Engineer who assisted the Advocate Commissioner in

the preparation of Exts.A8 and A8(a). It is upon the above

reasoning that the learned Sub Judge declined to accept the

valuation of the structures including building, ring-well etc. 2024:KER:74811

situated in the acquired property as Rs.8,00,000/- as reported

by the Advocate Commissioner and Private Engineer in

Exts.A8 and A8(a).

4. Heard the learned counsel for the appellants and the

learned Government Pleader representing the respondent.

5. The learned counsel for the appellants argued that

the Acquisition Officer had fixed the value of the structures

situated in the acquired property at Rs.4,48,105/- without any

basis, and that no evidence was adduced in the reference

proceedings in support of the above assessment. It is further

pointed out that the Reference Court erroneously declined to

award enhanced compensation for the aforesaid structures

notwithstanding the fact that the appellants adduced evidence

through Exts.A8 series that those structures fetched a value of

Rs.8,00,000/-. According to the learned counsel for the

appellants, the reason stated by the learned Sub Judge for not

accepting the commission report and valuation statement

marked as Exts.A8 and A8(a), is totally unsustainable since 2024:KER:74811

the respondent did not raise any objection to the above

documents.

6. Exts.A8 and A8(a) are the commission report and

valuation statement prepared by an Advocate Commissioner

and a Private Engineer in O.S.No.342/2004 of Munsiff Court,

Hosdurg, a suit instituted by the claimants at the time of

acquisition proceedings. The above commission report and

statement are seen prepared after giving notice to the counsel

representing the claimants as well as the Acquisition Officer

and others who were arraigned as defendants in that suit. The

Advocate Commissioner who prepared Ext.A8 report was

examined before the Reference Court as AW2. However, the

Reference Court refused to accept Exts.A8 series stating the

reason that the Advocate Commissioner was not competent to

speak about the valuation made in Ext.A8(a).

7. A perusal of Ext.A8(a) valuation statement would

reveal that the Private Engineer who prepared the said

statement had assessed the value of the building by taking

into consideration all the relevant parameters of cost of 2024:KER:74811

construction of that building. In addition to that, the Engineer

had valued the ring well situated in that property at

Rs.15,000/-. The amount of Rs.8,00,000/- is computed as the

value of the structures by adding the various expenses of

construction of the building which are enumerated in Ext.A8(a)

as item Nos.1 to 44. Obviously, the aforesaid amount stated

in Ext.A8(a) is the cost of construction of the structures as on

the date of preparation of that document. However, the

Engineer who prepared that valuation statement had not

applied the depreciation value of the building for arriving at

the exact value of the structures as on the date of

assessment. As regards the omission to calculate the

depreciation of the value of the structures, the Advocate

Commissioner has stated in paragraph No.VI of Ext.A8 report

that it was not calculated since there was no data available

before the Commissioner as to the age of the house.

8. In the proforma of valuation statement which is

attached to the abstract valuation statement of the structures

in Appendix 'A', prepared by the Assistant Executive Engineer, 2024:KER:74811

National Highway Sub Division, Kasaragod, which forms part

of the acquisition records, the age of the structures is shown

as 14 years. So also, it could be seen from paragraph No.4 of

the proof affidavit filed by the 1st claimant (1st appellant

herein) before the Reference Court that the construction of the

house in the acquired plot was completed in the year 1990 by

expending Rs.10,00,000/-. The above indication in the proof

affidavit of the 1st appellant would confirm the age of the

structures situated in the acquired property as 14 years as on

the year 2004 when Ext.A8 series were prepared.

9. The process of ascertaining the market value of a

building situated in the acquired property had been a

contentious issue in many litigations. A well known and

recognised method of valuation of the building for the purpose

of compensation is to ascertain the cost of construction of the

building at the relevant time and then to apply the

depreciation factor in consideration of the age of the building

and for the costs of such repairs as might be required. The

above principle was laid down by the Privy Council in 2024:KER:74811

Harichand v. Secretary of State [AIR 1939 PC 235] and

Secretary of State v. Narain Khanna [AIR 1942 PC 35].

The above two decisions of the Privy Council were considered

and approved by the Supreme Court in State of Kerala v.

C.L.Palu [(1979) 3 SCC 780].

10. The above method of valuation of building in

acquired properties has been followed by this Court in

Bhavani Ramalakshmi v. State of Kerala [1990 KHC

433]. It has been held by this Court in the said decision that

in the matter of valuation of buildings, the natural way to look

at the matter would be to find out the approximate number of

years and deduct the quotient as depreciation for each year.

It is further held in that decision that in the case of first class

buildings, no depreciation is to be deducted for the first five

years, and then 5/6% has to be deducted for every

subsequent year, and due allowance has to be made for the

maintenance and repairs. In the case of second class

buildings, it was held that 5/6% depreciation has to be

deducted for each year. The above basis of calculation of 2024:KER:74811

depreciation has been upheld by the Division Bench decisions

of this Court in State of Kerala v. Kuruvila [2005 (3) KLT

580] and State of Kerala v. Sushamma Kumari [2010 (2)

KHC 834].

11. It may be true that the Assistant Executive Engineer

of National Highway Sub-Division, Kasaragod might have

ascertained the value of the structures situated in the acquired

property at Rs.4,48,105/- on the basis of the PWD rates

prevailing during that time. However, it is not possible to

accept the published schedule of rates of PWD since it is

common knowledge that those rates are not realistic and far

below the actual expenses to be incurred for the constructions.

In State of Kerala v. Sushamma Kumari [2010 (2) KHC

834], the Division Bench of this Court has held that the

compensation fixed by the Land Acquisition Authority for the

building by placing reliance solely on the valuation prepared

by the Engineers of the PWD, cannot be approved. It is further

held in that decision that the published schedule of rates of

PWD adopted by the Engineers for the valuation of buildings, 2024:KER:74811

are not realistic, and that the PWD itself tenders out their civil

works at rates above their own rates.

12. As already stated above, Ext.A8 series have been

prepared by the Advocate Commissioner and a Private

Engineer, assessing the value of the structures situated in the

acquired property as on 26.10.2004, when they conducted the

local investigation, in accordance with the order of Munsiff's

Court, Hosdurg in O.S.No.342 of 2004, a suit instituted

against the Acquisition Authorities in connection with the same

acquisition as that of the present case. A perusal of Ext.A8(a)

valuation statement would reveal that the Engineer who

assisted the Advocate Commissioner had valued the structures

in a realistic way by applying the prevailing costs of materials,

labour charges, conveyance expenses, etc. The above

valuation has been made in the local investigation conducted

by the Advocate Commissioner and the Engineer, after giving

notice to both sides. The findings of the Advocate

Commissioner and the Engineer in Ext.A8 series, cannot be

eschewed for the sole reason that the Engineer was not 2024:KER:74811

examined as a witness before the Reference Court. Having

regard to the settled principles of law as evolved from the

judicial precedents discussed in paragraph Nos.9 to 11

hereinabove, I am of the view that the valuation of the

structures in the acquired property of the present case has to

be done by applying the depreciation factor of 5/6% per year,

from the date of construction onwards to the date of

assessment, upon the amount of Rs.8,00,000/-, which the

Advocate Commissioner and Engineer had fixed in Ext.A8

series. As already stated above, the age of the structures

assessed as 14 years by the Acquisition Authorities, has been

affirmed in the proof affidavit filed by the 1st appellant before

the Reference Court. That being so, the depreciation factor to

be applied would come to 11.66% which has to be rounded to

12%. When the above depreciation, worked out at

Rs.96,000/- is deducted from the amount of Rs.8,00,000/-

ascertained by the Advocate Commissioner and the Engineer

in Ext.A8 series, the actual amount payable to the claimants

as compensation for acquisition of the structures which existed 2024:KER:74811

in the acquired property would come to Rs.7,04,000/-. The

appellants (claimants) are entitled to have payment of the

aforesaid amount along with other statutory enhancements, as

compensation for the value of structures situated in the

acquired property.

In the result, the appeal stands allowed as follows:

(i) The amount of compensation to which the

appellants (claimants) are entitled as value of

structures is fixed as Rs.7,04,000/- (Rupees Seven

Lakh Four Thousand only).

(ii) The appellants (claimants) will also be entitled for

all statutory benefits, which would follow the

revised rate of compensation for value of

structures, as stated above.