Determination and Payment of Compensation under Kerala Land Reform Act, 1963

A paper submitted in partial fulfillment of the course requirements of Land & Agricultural Law

Submitted to: Mr. S. Sivamanithan

Submitted by: 08B147 08B103

LAND AND AGRICULTURAL LAW

DETERMINATION AND PAYMENT OF COMPENSATION (KERALA LAND REFORM ACT)

INTRODUCTION
The Kerala Land Reforms Act, 1963 is social welfare legislation. The object of the Act is to enact a comprehensive legislation relating to land reforms in the state of Kerala. This act repealed several laws which existed in Travancore, Malabar and Cochin. It has been amended many a time and among them the amendment in 1972 brought important changes in the Act. The Kerala Land Reforms Act, 1963 (Act 1 of 1964) as originally enacted was specified in the Ninth Schedule to the Constitution and was thus protected under Article 31-B of the Constitution. The Act was a bold step towards breaking down the caste and class barriers in the state and allowed the masses to partake in any economic prosperity enjoyed by the state. The landlords i.e. the ruling class were forced to give up their lands for the benefit of their tenants. A person whose land is acquired under the act has a right to fair compensation for the land acquired by the government.

I.

MATTERS TO BE CONSIDERED IN DETERMINING COMPENSATION

According to Section 23(1) of the Act, in determining the amount of compensation to be awarded for land acquired under the Act, the Court shall consider the following factors: The market value of the land at the date of publication of the notification under Section 4, Subsection (1); The damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the collectors taking possession thereof; The damage sustained, if any, by the person interested, at the time of the Collectors taking possession of the land, by reason of severing such land from his other land; The damage sustained, if any, by the person interested, at the time of the Collector s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; If in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses incidental to such chance; and

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The damage bona fide resulting from the diminution of the profits of the land between the time of the publication of the declaration under Section6 and the time of the Collectors taking possession of the land.

According to Section 23(1-A) in addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of 12% per annum on such market-value for the period commencing on and from the date of the publication of the notification under 4(1) in respect of such land to the date of the award of the collector or the date of taking possession of the land, whichever is earlier. In computing the period, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the Order of any court shall be excluded. In Kerala State Industrial Development Corporation v. Naniamma Lakshmikutty Amma1 It was held that the same reasoning in not accepting a post-notification document on the ground that there was rise in price after notification must also apply to the rejection of a basis document where it is shown that there was upward increase in value of lands after the fate of basis document and before the issue of Section 4(1) notification.

According to Section 24 the Court is not to take into consideration the following factors while determining compensation: The degree of urgency which had led to the acquisition; Any disinclination of the person interested to part with the land acquired; Any damage sustained by him which, if caused by a private person would not render such person liable to a suit; Any damage which is likely to be caused to the land acquired, after the date of the publication of the declaration under Section 6, by or in consequence of the use to which it will be put; Any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired; Any increase to the value of the other land of the person interested likely to accrue from the use to which the land acquired will be put;

2007 (3) KLT 194.

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Any outlay or improvements on, or disposal of, the land acquired, commenced, made or effected without the sanction of the Collector after the date of the publication of the notification under Section 4(1); or

Any increase to the value of the land on account of its being put to any use which is forbidden by law or opposed to public policy.

According to Section 25 of the Act, the amount of compensation awarded by the Court shall not be less than the amount awarded by the collector under Section 11. In the case of Yamuna v. Special Tahasildar,2 it was held that under the amended Act, a claimant is entitled to claim land value before Reference Court, in excess of what he claimed before Land Acquisition Officer and Court is bound to independently investigate claim based on materials on record. According to Section 26 of the Act, every award under the part shall be in writing, signed by the Judge, and shall specify the amount awarded under the first clause of Sub- (1) of Section 23. And also the amounts respectively awarded under each of the other clauses of the same sub-, along with the grounds of awarding each of the said amounts. Every such award shall be deemed to be a decree and the statement of the grounds of every such award, shall be a judgment. According to Section 27 of the Act, every such award shall also state the amount of costs incurred in the proceedings under this Part, and by what persons and in what proportions they are to be paid. When the award of the Collector is not upheld, the costs shall ordinarily be paid by the Collector, unless the Court be of the opinion that the claim of the applicant was so extravagant or that he was so negligent in putting his case before the collector that some deduction from his costs should be made or that he should pay a part of the Collectors costs. According to Section 28 of the Act, the Collector may be directed to pay interest on excess compensation. If the sum which, in the opinion of the Court, the Collector ought to have awarded as compensation is in excess of the sum which the collector did award as compensation, the award of the court may direct that the Collector shall pay interest on such excess at the rate of nine percent per annum from the date on which he took possession of the land to the date of payment of such excess into court.

2007 (3) KLT 581

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Provided that the award of the Court may also direct that where such excess or any part thereof is paid into court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of 15% per annum shall be payable from the fate of expiry of the said period of one year on the amount of such excess or part thereof which had not been paid into Court before the date of such expiry. In the case of Hindustan O.C. Ltd. V. Damodaran Namboodiri,3 it has been held that benefits under the Amendment Act can be granted even if the same is not claimed earlier. According to Section 28A where in an award under the Part, the Court allows to the applicant any amount of compensation in excess of the amount awarded by the Collector under Section 11, the persons interested in all other lands covered by the same notification under Section 4(1) and who are also aggrieved by the award of the collector may given the same. Even if they had not made an application to the collector under Section 18, by written application to the collector within 3 months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the Court. Provided that in computing the period of 3 months within which an application to the collector shall be made under this sub-Section, the day on which the award was pronounced and the time requisite for obtained a copy of the award shall be excluded. According to Section 28A(2) of the Act, the Collector shall, on receipt of an application under Sub-Section (1) conduct an inquiry after giving notice to all the persons interested and giving them a reasonable opportunity of being heard and make an award determining the amount of compensation payable to the applicants. According to Section 28A (3) of the Act, any person who has not accepted the award under Sub-Section (2) may, by written application to the collector, require that the matter be referred by the collector for the determination of the Court and the provisions of Sections 18 to 28 shall, so far as may be, apply to such reference as then apply to a reference under Section 18. In the case of GCDA v. Mathew4 It has been held that if the Land Acquisition authority reopens a concluded award or re-determines the amount of compensation without giving notice to the persons who is to pay the compensation amount, it is so done without due care and attention and shows a non-application of the mind and so mala fide. In another case of
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1986 KLT 1013 1989 (1) KLT 739.

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Mathai Thomas v. State of Kerala5 it was held that Section 28A does not apply to a case where the claimant failed to make an application to the Collector within the time mentioned in the Act. In the case of Savithry Amma v. State of Kerala6 it has been held that the Order refusing to re-determine the compensation payable to the affected party on the basis of the amount of compensation awarded by the Court will also be an award within the meaning of Sub-Sections (2) and (3).

II.

APPORTIONMENT OF COMPENSATION

According to Section 29 of the Act, where there are several persons interested, if such person agree in the apportionment of the compensation, the particulars of such apportionment shall be specified in the award, and as between such persons the award shall be conclusive evidence of the correctness of the apportionment. In the case of Ram Chander Darak v. Ganesh Das Rathi7 it was held that while the widow is alive, person is not entitled to any share in the compensation received by her on acquisition of property in which she had a limited estate. According to Section 30, when the amount of compensation has been settled under Section 11, if any dispute arises as to the apportionment of the same or any part thereof or as to the persons to whom the same or any part thereof is payable, the Collector may refer such dispute to the decision of the Court. According to Section 31(1) of the Act, on making an award under Section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the subsequent sub-Section. According to Section 31(2) of the Act, if they shall not consent to revive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under Section 18 would be submitted. Provided that any person admitted to be interested, may receive such payment under protest as to the sufficiency of the amount and no person who has received the amount, otherwise than under protest, shall be entitled to make any application under Section 18.

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1989 (2) KLT 732. 1990 (2) KLT 365. 7 AIR 1984 SC 42.

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According to Section 31(3) of the Act notwithstanding anything in this section, the Collector may, with the sanction of the appropriate Govt., instead of awarding a money compensation in respect of any land, make any arrangement with a person having a limited interest in such land, either by the grant of other lands in exchange, the remission of land revenue on other lands held under the same title, or in such other way as may be equitable having regard to the interest of the parties concerned. According to Section 32(1) of the Act, if any money shall be deposited in Court under SubSection (2) of the last preceding Section and it appears that the land in respect whereof the same was awarded belonged to any person who had no power to alienate the same, the Court shall: 1. Order the money to be invested in purchase of other lands to be held under the like title and conditions of ownership as the land in respect of which such money shall have been deposited was held, or 2. If such purchase cannot be effected forthwith, then in Government or other approved securities as the Court shall think fit; and shall direct the payment of the interest or other proceeds arising from such investment to the person or persons who would for the time being have been entitled to the possession for the said land, and such money shall remain so deposited and invested until the same be applied. In the purchase of such other lands as aforesaid; or In payment to any person or persons becoming absolutely entitled thereto.

According to Section 32(2) of the Act, in all cases of money deposited to which this Section applies, the Court shall order the costs of the following matters, including therein all reasonable charges and expenses incident thereto, to be paid by the Collector, namely:a. The costs of such investments as aforesaid; b. The costs of the Orders for the payment of the interest or other proceeds of the securities upon which such money is for the time being invested, and for the payment out of Court of the Principal of such money, and of all proceeding relating thereto, except such as may be occasioned by litigation between adverse claimants.

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III.

INVESTMENT OF MONEY DEPOSITED IN OTHER CASES

According to Section 33 of the Act, when any money shall have been deposited in Court under this Act for any cause other than that mentioned in the Section 32, the Court may, on the application of any party interested or claiming an interest in such money, order the same to be invested in Government or other approved securities as it may think proper, and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as it may consider will give the parties interested therein the same benefit there from as they might have had from the land in respect whereof such money shall have been deposited or as near thereto as may be.

IV.

PAYMENT OF INTEREST

Section 34 provides that when the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of 9% per annum from the time of so taking possession until it shall have been so paid or deposited. Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of 15% per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such enquiry.

CONCLUSION
The Kerala Land Reforms Act, 1963 was introduced as an ordinance by the first communist government soon after it came to power in Kerala. It sought to abolish the exploitation and inequalities existing in the agrarian sector due to the existing rural zamindari system. It legitimized the rights of real peasants to own the land they cultivated on. The drastic changes brought an end to the era of feudalism and was massively criticized and challenged by the well-off feudal lords especially in the Nair community. As a result, large affluent jenmi joint families which survived on the produce and hard-work of the tenants had
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DETERMINATION AND PAYMENT OF COMPENSATION (KERALA LAND REFORM ACT)

to give up their land to the state for reasonable compensation. As it introduced a land ceiling system whereupon excess land was to be given to the State which was distributed among the tenants who were the actual cultivators of the land. This phenomenon was attributed to be one of the fundamental causes of a mass exodus of well to do, educated malayalees who avoided compulsory acquisition by selling off their land and moving to other states. It is therefore surprising to see the extent of similarities in terms of the determination and payment of compensation between the Kerala Land Reform Act, 1963 and the current Land Acquisition Act, 1894. Even though the state act initially created a disparity of economies which led to widespread furore8 at the regional and national level, even leading to the premature exit of the first communist government; it has held its own in terms of the objects and principles on which it was founded. Considering the then state of affairs and tensions between the haves and the have-nots during the tenure of the Communist government, we see no vindictive provisions other than the land ceiling mechanism within the Central Act. Fifty years down the lane, the question arises as to the relevance of the legislation today. In 2008, Mr. T. Balakrishnan, the then principal secretary of industries and commerce of the state suggested that the Land Reform Act is no longer relevant and must be repealed. It was his view that the state would face stagnation as the agricultural production came down due to the fragmentation of agricultural land and it was time to make a shift from intensive farming on small tracts of land to extensive farming over vast expanses of land employing modern machinery and technology. 9 The debate was about the ceiling limit of 15 acres which inhibits industrialists from entering the agricultural sector (other than collective or cooperative farming), thus disallowing the extraction of macro-economic advantages of producing cash-crops on a large scale. This view is inconsistent with the views of Swami Bodhananda who was of the opinion that distributing wealth without creating it would amount to distribution of poverty. However, this view has been criticized by many arguing that the individual farmer has the right to utilize the land as it suits him best and repealing the land ceiling is just a political conspiracy to aid large corporations and industries.

A popular notion amongst academicians is that the Land Reform ordinance played a key role in denying extremist factions from volunteers thanks to the upliftment of the lower strata of the society 9 K.C.Mammen Mappilai Memorial Lecture on Economics, Management and Leadership, 2008

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REFERENCES 1. V. G. RAMACHANDRAN, LAW

OF

LAND

ACQUISITION

AND

COMPENSATION, EASTERN BOOK COMPANY, 1984 2. PRAMOD KUMAR AGARWAL, LAND REFORMS
IN

INDIA:

CONSTITUTIONAL AND LEGAL APPROACH, MD PUBLICATIONS PVT LTD., 1993 3. V. BHASKARAN NAMBIAR 1963 4. BIKRAM SARKAR, LAND REFORMS IN INDIA: THEORY & PRACTICE, APH PUBLISHERS, 1989 5. P. EASHVARAIAH, THE COMMUNIST PARTIES IN
POWER AND ET AL,

THE KERALA LAND REFORMS ACT,

AGRARIAN

REFORMS IN INDIA, ACADEMIC FOUNDATION, 1993

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