KERALA STATE ELECTRICITY BOARD Vs. VARGHESE THOMAS

JUDGEMENT

(1.) hese civil revision petitions which have been referred to a division bench, and others which are posted before us, have arisen out of orders passed by District Judges under S.16 of the Indian Telegraph Act 1885, settling the compensation payable under S.10 proviso (d) of that Act, for damage caused to owners of immovable properties, in taking electric supply lines across their properties, in exercise of the powers conferred by S.51 of the Indian Electricity Act, 1910, or by S.42 of the Electricity (Supply) Act, 1948. The Kerala State Electricity Board, to be referred to as the Board, which was constituted on April, 1957, and in whom, the liability to pay compensation is now vested, was not a party to some of these civil revision petitions. At the time they were referred, Shri K.V. Suryanarayana Iyer, appearing for the Board agreed, that it may be impleaded as a party, and accordingly the referring order itself directed its impleadment. At the hearing of these and the other civil revision petitions now before us, Shri K.V. Suryanarayana Iyer appeared for the Board and we hereby order, that the Board be recorded as a party respondent in all the civil revision petitions which are before us, and in which it is not already a party. We also ordered notice on these revision petitions to the learned Advocate General, and the learned Government Pleader has appeared for him. These and other civil revision petitions posted before us, raise a common question as to the principles to be adopted in settling compensation payable under S.10 proviso (d) of the Indian Telegraph Act, 1885. In this judgment, we record our answer to the question raised, by laying down certain principles

(2.) The relevant part of S.51 of the Indian Electricity Act, 1910, may be extracted as follows:-

(3.) The lands through which the electric supply lines have been taken, are all agricultural lands and in taking them, fruit bearing trees, such as cocoanut, arecanut and jack trees, yielding trees such as rubber trees, and also pepper vines, apart from other non bearing or non yielding trees, were destroyed; the destruction of such fruit bearing or yielding trees and pepper vines, constitutes the main item of damage for which compensation is payable. In certain cases, other damage caused to the lands by placing the supply lines across them, had also been set up and in one or two instances, damage had also been awarded, though on a nominal basis. For determining the compensation payable for the destruction of fruit bearing or yielding trees, the District Judges have adopted three methods. One was to fix compensation at 8 1/3 years purchase of the annual net yield, following the time-honoured method prevalent in Travancore area for settling compensation payable for improvements, the second, to capitalise the annual net yield at 20 years purchase, as has been the practice in the Cochin area for awarding compensation for improvements and for the acquisition of lands under the Land Acquisition Act and in between was the third, to capitalise at 15 years purchase. The learned counsel for the Board took the stand, that all the three methods are faulty, wrong in principle and ought not to be followed; according to him, the proper and the only method for estimating such damage, is to ascertain the diminution in the market value, that the property, as a unit, has suffered, in consequence of the damage; in other words, the difference in the market value of the property before and after the damage was caused, can alone represent the compensation payable. He did not agree, that capitalisation at 8 1/3 or at 15 years purchase, is a fair method and did not rely on capitalisation at 20 years purchase even, except as furnishing an index as to the reasonable interest, which the owner might expect on his investment. He maintained, that the only alternative principle which may be followed in the case of trees which are subject to natural decay, is to ascertain the present worth or value at a fair rate of interest, of an annuity which represents the net annual rental, for such number of years as the tree would be productive in future. The learned Government Pleader, while agreeing that capitalisation at 8 1/3 years purchase is not fair, also urged, that the market value test formulated above is the valid test and no other. But counsel for the claimants have contended for the position, that damage caused to the trees is ascertainable easily and need not be made to depend on the market value before and after, and pleaded for the rule of capitalisation at 20 years purchase, regardless of any principle for ascertaining the present worth; but they agreed, that the market value test is useful, when other items of damage are involved, which affect the property or its potential value, and are more readily ascertainable, by applying it. Our endeavour is to lay down, what is the fair method to be followed in such cases.