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CASE NO.: Appeal (civil)  289 of 2006

PETITIONER: The Kerala State Electricity Board

RESPONDENT: Livisha  etc. etc.

DATE OF JUDGMENT: 18/05/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

With CA 1810/06, 1938/06, 1939/06, CA 2774/2007 @ SLP(C) 2658/05, CA  2773/2007 @ SLP(C) 26214/05, CA 2772/2007 @ 1020/06, CA  2771/2007 @  SLP(C) 6451/06, CA 3769/06 and CA 145/07.

S.B. SINHA, J.

1.      Leave granted in SLPs. 2.      These appeals involving common questions of law and fact were  taken up for hearing together and are being disposed of by this common  judgment.  What would be the amount of compensation for the trees cut and  removed by the Kerala State Electricity Board, a body corporate, constituted  and incorporated under Electricity (Supply) Act, 1948 is the question  involved in these appeals.  Indisputably, amount of compensation for the  said purpose is determined in terms of the provisions of Section 10, Part III  of the Indian Telegraph Act, 1885. 3.      Before we embark upon the said question, we may notice the amount  of compensation that has been determined by the Appellant-Board as also by  the Reference Court being the District Judge.   4.      Trees have been cut and removed for drawal of 110 K.V. Electric  Line.  The Board/Land Acquisition Officer determined the amount of  compensation whereupon reference was made.  The learned District Judge  while determining the amount of compensation followed a judgment of 5  Judge Bench of the Kearla High Court in Kumba Amma v. K.S.E.B. [2000  (1) KLT 542], holding that annuity thereof shall be calculated on the basis of  5% return.  Revision applications having been filed thereagainst.  The High  Court in some cases, as noticed hereinbefore, enhanced the amount of  compensation, fixing the rate of diminution at 50% instead of 40%. 5.      It is not in dispute that the High Court of Kerala at different point of  time took different views in the matter.  To begin with, in Kerala Electricity  Board v. Thomas [1961 KLT 238], it was held that the principle which  should be resorted to for the said purpose is annuity method.  Fair return of  5%  interest per annum was held to be reasonable for calculating the amount  of compensation.  Allegedly, the Board was following the principle laid  down in the said judgment in determining the amount of compensation.    6.     The question again came up for consideration before the High Court  in K.S.E. Board v. Marthoma Rubber Co. Ltd. reported in 1981 KLT 646,  wherein a Full Bench of the said Court opined that it would be safe to adopt  the means of return on a fixed deposit for the usual period of 5 years or 63  months whichever is held reasonable and anticipated return for long term  basis.   The usual bank rate of interest at the relevant point of time was 10%  for long term deposits, i.e., over 5 years.  The said rate of interest was  adopted by the Board to be a fair return and the amount of annuity was being  calculated on the said basis.  However, in Kumba Amma (supra), a 5 Judge  Bench of the High Court opined that inflation was a relevant factor which  should be taken into consideration while computing the amount of

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compensation for destruction of trees. 7.      We may, however, notice that in one of the impugned judgments, a  learned Single Judge of the High Court held :-

"The court below has fixed the land value at  Rs.20,000/- per cent and the rate of diminution at  40%.  Taking Exhibits A1 and A2 produced, the  lower court is correct in fixing the land value at  Rs.20,000/- per cent cannot be the reasonable land  value in this case.  Hence I fix the land value in  this case at Rs.30,000/- per cent.  So also the rate  of diminution in land value is fixed at 50% instead  of 40% fixed by the court below.  The order passed  by the court below is modified accordingly."

No reason has been assigned in support of the above view.  The materials  placed on record were not analysed.  Why such a view was taken also does  not appear from the records of the case.  The amount of compensation is  required to be determined keeping in view the purpose and object of the  statute.   There cannot be any fixed formula therefor or the other.  Although,  undoubtedly one formula laid down, may assist the Board and/or Reference  Court to apply the same but there cannot be hard and fast rule in this behalf.   A fixed formula for determining the amount of compensation although may  make the task of the Land Acquisition Officer or the Reference Court easier  but in our opinion each case is required to be taken on its own merit.  We  may hasten to add that the purpose and object of the Act and the  methodology laid down therein for the purpose thereof should be the guiding  factor.  The 5 Judges Bench of the Kerala High Court referred to a large  number of decisions which are applicable in the cases of death or fatal  accident.  It is from that point of view that the 5 Judges Bench proceeded to  consider as to what is meant by ’real rate of interest’.  Ultimately opining  that 5% return as held in the case of Thomas (supra) and not a higher rate of  interest as observed in K.S.E Board (supra) should be the guiding factor, it  was held :-

"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."

8.      The Indian Telegraph Act was enacted to amend the law relating to  telegraphs in India.  Section 51 of the Indian Electricity Act, 1910 reads as  under:-

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"51. Exercise in certain cases of powers of  telegraph authority.- Notwithstanding anything  contained in sections 12 to 16 (both inclusive) and  sections 18 and 19, the State Government in the  case of intra-State transmission system, may, by  order in writing, for placing of electric supply- lines, appliances and apparatus for the  transmission of energy or for the purpose of  telephonic or telegraphic communication necessary  for the proper coordination of works, confer upon  any public officer, licensee or any other person  engaged in the business of supplying energy to the  public under this Act, subject to such conditions  and restrictions (if any) as the State Government   may think fit to impose, and to the provisions of  the Indian Telegraph Act, 1885 (3 of 1885), any of  the powers which the telegraph-authority possesses  under the Act, with respect to the placing of  telegraph-lines and posts for the purposes of a  telegraph established or maintained by the  Government or to be so establishment or  maintained."     9.      Both telegraph lines and electrical lines are required to be drawn over  the agricultural lands and/or other properties belonging to third parties.  In  drawing such lines, the entire land cannot be acquired but the effect thereof  would be diminution of value of the property over which such line is drawn.   The Telegraph Act, 1885 provides for the manner in which the amount of  compensation is to be computed therefor.  Section 10 of the Act empowers  the authority to place and maintain a telegraph line under, over, along or  across, or posts in or upon any immovable property.  Section 11 empowers  the officers to enter on property in order to repair or remove telegraph lines  or posts. Section 12 empowers the authority to grant permission for laying  down such lines to a local authority in terms of clauses (c) & (d) of the  proviso to Section 10 of the Act subject to reasonable conditions as it may  think fit.  Section 16 of the said Act reads as under :-

"16. Exercise of powers conferred by section 10,  and disputes as to compensation, in case of  property other than that of a local authority.- (1) If  the exercise of the powers mentioned in section 10  in respect of property referred to in clause (d) of  that section is resisted or obstructed, the District  Magistrate may, in his discretion, order that the  telegraph authority shall be permitted to exercise  them.

(2) If, after the making of an order under section  (1), any person resists the exercise of those  powers, or, having control over the property, does  not give all facilities for their being exercised, he  shall be deemed to have committed an offence  under section 188 of the Indian Penal Code, 1860  (45 of 1860).

(3) If any dispute arises concerning the sufficiency  of the compensation to be paid under section 10,  clause (d), it shall, on application for that purpose  by either of the disputing parties to the District  Judge within whose jurisdiction the property is  situate, be determined by him.

(4) If any dispute arises as to the persons entitled  to receive compensation, or as to the proportions in

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which the persons interested are entitled to share in  it, the telegraph authority may pay into the court of  the District Judge such amount as he deems  sufficient or, where all the disputing parties have  in writing admitted the amount tendered to be  sufficient or the amount has been determined  under sub-section (3), that amount; and the District  Judge, after giving notice to the parties and hearing  such of them as desire to be heard, shall determine  the persons entitled to receive the compensation or,  as  the case may be, the proportions in which the  persons interested are entitled to share in it.

(5) Every determination of a dispute by a District  Judge under sub-section (3), or sub-section (4)  shall be final:

       Provided that nothing in this sub-section  shall affect the right of any person to recover by  suit the whole or any part of any compensation  paid by the telegraph authority, from the persons  who has received the same."

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 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."  

13.     We are, therefore, of the opinion that the High Court should consider  the matter afresh on the merit of each matter having regard to the fact  situation obtaining therein.  The impugned judgments, therefore, cannot be  sustained.  These are set aside accordingly.  The matters are remitted to the  High Court for consideration thereon afresh.  The appeals are allowed.  In  the facts and circumstances of the case, there shall be no order as to costs.