Laila, W/o. Abdullakutty v. The Special Tahsildar (L. A)
2019-04-12
A.M.SHAFFIQUE
body2019
DigiLaw.ai
JUDGMENT : 1. This is an unusual case where this Court is called upon to decide the validity of an agreement executed by the petitioners under Section 11(2) of the Land Acquisition Act, 1894 (for short, the “LAA 1894”) on principles of private law applicable to a contract. 2. The central issue that also arises in this case is, what is the extent of the judicial power in public law to interfere with an agreement entered into between public officials and private persons. 3. The petitioners are wife and children of one Abdullakutty. They belong to a marginalised group in social strata as revealed before this Court from the report of the District Legal Services Authority, Thrissur. The said report was furnished pursuant to the direction of this Court. The petitioners were owners of 0.119 hectares of land in the heart of Thrissur town, precisely located at Ayyanthole. This land was notified for acquisition for the development of West Fort Chungam Model road at Thrissur. Invoking urgency clause, a notification under Section 4(1) of the LAA 1894 was issued on 11.12.2012. Section 11(ii) of the Land Acquisition Act, 1961 (Kerala) permits the Collector to pass an award based on the agreement with the persons, who are interested in the land. Accordingly, fixing the land value at Rs.7,50,000/- per cent, the petitioners agreed to surrender the land. There is a prescribed format to pass an award based on the agreement. Form No.10(a) of the Land Acquisition (Kerala) Rules, 1990 (for short, the “Rules 1990”) prescribes the mode of agreement. Rule 12(5) of the Rules 1990 prescribes that it shall be in Form No.10(a). It is specifically stipulated in Rule 12(5) that the agreement shall be executed between the owner or owners of the land on one part and the District Collector for and on behalf of the Government of Kerala on the other part. This agreement is not compulsorily registerable in the light of Section 11(4) of LAA 1984. In this case, admittedly, the District Collector had not executed any agreement. This agreement can be made as an award in the light of Section 11(2) of the LAA 1894. 4. The compensation was fixed at Rs.22,05,000/- for 0.119 hectares and Rs.88,442/- towards the compound wall. As per the fair value register, the land value is Rs.34,58,000/- per Are. The centage value would then work out to Rs.14,00,000/- (Rupees fourteen lakhs only).
This agreement can be made as an award in the light of Section 11(2) of the LAA 1894. 4. The compensation was fixed at Rs.22,05,000/- for 0.119 hectares and Rs.88,442/- towards the compound wall. As per the fair value register, the land value is Rs.34,58,000/- per Are. The centage value would then work out to Rs.14,00,000/- (Rupees fourteen lakhs only). The petitioners were paid compensation at Rs.7,50,000/- much below the fair value. The petitioners have a case that the market value of the land was Rs.30,00,000/- per cent. The petitioners were told that if the petitioners were not agreeing, the compensation amount would be less if an award is passed otherwise. Believing and placing trust on public officials, the petitioners signed the agreement. 5. The petitioners challenge the award of compensation alleging arbitrary fixation of compensation and also on the ground of non-compliance of procedural formalities for signing the agreement. 6. What is the scope of enquiry in public law in regard to the validity of an agreement? There is no distinction between an agreement entered into between the private persons or private persons with the public officials. However, in a contract entered into with public officials, the Court can still examine the fairness of procedure adopted by the public officials. The Court possesses a remedial discretion in cases where the Court finds the action of public officials are questionable on any principles on which such actions can be questioned under private law. However, the Court has to exercise power circumspectiously. The power can be exercised only when the Court can formulate an opinion based on the records that such an agreement is vitiated. The Court cannot convert jurisdiction of judicial review in a like manner adjudicating a civil dispute. Article 14 of the Constitution of India postulates principles of fairness. Therefore, the administrative authorities are bound to act fairly. What is fairness, is a matter of appreciation in a context of the dispute. The vitiating elements of the contract are also inverse to the principles of fairness, therefore, the judicial intervention to the extent of scrutiny of fairness is possible invoking the power under Article 226 of the Constitution of India. 7. Land Acquisition enactments are enactments providing procedural fairness.
The vitiating elements of the contract are also inverse to the principles of fairness, therefore, the judicial intervention to the extent of scrutiny of fairness is possible invoking the power under Article 226 of the Constitution of India. 7. Land Acquisition enactments are enactments providing procedural fairness. The power of the Government to take private property without the owner's consent is ordained through the land acquisition enactments to ensure justice to the owner through a fair procedure. 8. This Court, in the light of the argument raised by the petitioners that they belong to a poor marginalised group of the Society, and also taking note of the fair value fixed in the area, directed the DLSA to report the status of the petitioners. DLSA interacted with the petitioners. The report would indicate that the petitioners were not residing in this place. They hail from Malappuram and they acted on the words of the Special Tahsildar. They also stated that they have no idea about the fair value fixed in the area. The first petitioner is a drop out from the 5th standard. Her husband had only studied upto 10th standard. The husband of the first petitioner was employed in the gulf as a salesman and using his hard earned money, he purchased the above said land. 9. The fair value of the land would show that the centage value of the land as fixed in the year 2010 was Rs.14,00,000/- per cent. The land was taken over from the petitioners in the year 2013 on payment of compensation for the land value at Rs.7,50,000/- per cent. The market value of the property must be much higher than this. What was the reason for offering a lower price to the petitioners? No answer is forthcoming. In the counter affidavit, it is stated that the petitioners voluntarily agreed to sell the land at Rs.7,50,000/- per cent. When there is a huge gap between the land value paid and the land value payable, the dominant person owes an answer. In a country where people are struggling against the circumstances and odds faced by them, they place trust on public officials. Marginalised and those who belong to socially backward strata of the Society trust that such public officials would act in the best interest to protect them. In a democratically governed State, the virtue of democracy is the quality of the institution it provides.
Marginalised and those who belong to socially backward strata of the Society trust that such public officials would act in the best interest to protect them. In a democratically governed State, the virtue of democracy is the quality of the institution it provides. Quality of institution means, how well it is connected with the common citizen. Common citizen place trust on public institutions with the hope that such institutions would deliver justice to them. If such institutions betray hope, that will lead to erosion of public confidence in the public institutions. Today it seems ordinary citizen think public institutions are only for influential and powerful. They are left high and dry pushed to a situation like this. The public officials are public servants to serve the people and protect their interest. 10. The fixation of fair value has an element of market value and this was to avoid defrauding stamp duty payable. Section 28A of the Kerala Stamp Act, 1959 refers to the manner in which the fair value of the land is fixed. The Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995 also refers to the procedure for fixation of fair value. The substantial provisions, as well as the rules of procedure, would clearly indicate that fixation of the fair value is based on the potential economic value of the land. The law presumes that this value is a fair value and in the normal course, the persons would transact saleable interest in the land at least on a value fixed as above. When the fair value fixed in respect of a property is shown to have higher value than the compensation offered, public officials are bound to explain reasons for offering such lesser amount, lest undue influence will have to be presumed. The compensation now fixed, no doubt, no prudent man would accept in any circumstances. 11. In presumed undue influence, the burden of proof lies on the party, who is in dominant position to influence the other party to show that the agreement was not the result of the undue influence. Lord Chelmsford had expounded the rule on 'presumed undue influence' in Tate v. Williamson [(1866) LR 2 Ch. App.
11. In presumed undue influence, the burden of proof lies on the party, who is in dominant position to influence the other party to show that the agreement was not the result of the undue influence. Lord Chelmsford had expounded the rule on 'presumed undue influence' in Tate v. Williamson [(1866) LR 2 Ch. App. 55] as follows: “Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed.” The exposition of the law in Tate's case(supra) refers to the use of naturally grown confidence by a dominant on a victim. The public officials in India have huge clout among the common people. The structure of democratic polity creates a presumption that the public officials will not do any harm to the public. Therefore, in such circumstances, if it is shown that action was against their interest, the presumption would be drawn against the dominant. In the absence of any explanation, it has to be presumed that the officials have exploited penurious circumstances of ordinary citizen making them believe that in the ordinary course of the award, they will be paid less amount. The confidence placed by the ordinary citizen on public officials has shaken. The officials have exploited the vulnerability of such citizens. 12. There is yet another reason for interfering with this matter. Ext.P1 is an agreement as prescribed under Rule 12(5) of the Rules 1990. Rule 12(5) reads as follows: “The agreement shall be in Form No.10(a) appended to these rules and it shall be executed between the owner or owners of the land of any person or persons interested therein on the one part and the District Collector for and on behalf of the Government of Kerala, on the other part.” 13. In the light of the above Rule, the District Collector alone is competent to enter into an agreement.
In the light of the above Rule, the District Collector alone is competent to enter into an agreement. In the absence of District Collector being a party to such agreement, there is no legal sanctity in passing an award under Section 11(2) of the LAA 1894. Therefore, there is no award in the eye of law to take over the land. A Division Bench of Gauhati High Court in the State of Meghalaya and Others v. Winkle Star Kharumlong and Others [2008 KHC 7664] also have taken the view that an agreement dispensing all required formalities is bound to flop. 14. The upshot of the discussions is that the entire proceedings leading to the acquisition will have to be set aside. Accordingly, I do so. Since the petitioners have no other objection except to the quantum of compensation, I direct the District Collector to pass fresh award based on the provisions under the Act 30/2013. The Compensation amount shall be recalculated and disbursed in accordance with the Act 30 of 2013 within a period of three months. The writ petition is allowed. No costs.