NH widening: Court strikes down Kasaragod Collector's 'patently illegal' order to slash compensation by 25%

Kasaragod: An additional district court struck down a 'patently illegal' order issued by the District Collector to reduce by 25% the compensation awarded to residents who gave up their land for the expansion of National Highway 66.

The Additional District Judge - III Unnikrishnan A V set aside the order of the then Collector D Sajith Babu on a petition filed by Sri Varadaraj Venkataramana Temple belonging to the Gowda Saraswat Brahmin community.

The order of Sajith Babu, who is now the Commissioner of Civil Supplies & Consumer Affairs, had triggered an avalanche of arbitration cases and lawsuits because NHAI started asking landowners who received "excess" compensation to return the money and denying already agreed upon compensation to others in Kasaragod village.

"Around 40 of us filed separate petitions before the Additional District Court against Sajith Babu's order. This verdict is on the petition filed by the temple. So others will have to go through the same long time-consuming legal process," said K Pundalika Shenoy, an executive committee member of the Sri Varadaraj Venkataramana Temple. The landowners would continue to suffer unless there is punitive action against NHAI officials who drag already settled cases in court, he said.

How the Collector violated rules and go away
In December 2013, a notification was published in the Gazetted to acquire land for the six-laning of National Highway 66 under Section 3D of the National Highways Act, 1956. The Competent Authority for Land Acquisition (CALA), usually a Deputy Collector from the state government, is appointed to come up with the valuation and extent of land that has to be acquired.

To discover the base price of land, the Competent Authority (CALA) has to shortlist at least six land transactions in the area or village in the preceding three years. The average of the highest three sale prices will be the base price.

In January 2018, the Competent Authority concluded that the base price in Kasaragod revenue village, which is part of Kasaragod municipal town, was Rs 13,776 per sq m or Rs 5.58 lakh per cent. NHAI's Project Director in Kozhikode approved the same.

According to the land acquisition rule, land losers are given the base price plus 100% of the base price as solatium, plus 12% interest per annum from the date of notification to the actual date of awarding the compensation or possession of the land.

In Kasaragod village, the compensation excluding the interest rate came to Rs 11.16 lakh per cent.

When the base price was calculated in 2018, the highest transaction CALA could find was Rs 19,775 per sq meters or Rs 8 lakh per cent.

But there was a sale at Rs 30,000 per sq metre or around Rs 12 lakh per cent, said Shenoy. The temple -- which was losing a commercial building on 14.21 cents (575 sq m) at Karanthakad in Kasaragod town, approached the arbitrator, who is the District Collector, seeking a higher base price of Rs 20,000 per sq metre or around Rs 8 lakh per cent. The collector never took up the arbitration case.

But in January 2021, three years after NHAI approved the base price discovered by CALA, NHAI's then Project Director in Kozhikode Nirmal Zade approached the arbitrator saying the base price of several plots, including the temple's commercial property, was on the higher side and sought a reduction.

To be sure, from 2018 to 2021, many landowners were compensated at the rate of Rs 13,776 per sq metre, following the norm of one village, one price. The temple was also awarded nearly Rs 3 crore for its 14.21 cents of land and Rs 45 lakh for its commercial building.

Sajith Babu, who was the District Collector and Arbitrator, took up the NHAI's arbitration case almost immediately. "We vehemently argued with him to tag the temple's petition with NHAI's petition because both were concerned with the valuation of the same plot. But he acted as if he had no fundamental knowledge of the law and refused to club the two petitions," said Shenoy.

The collector heard only the NHAI's arbitration case. He then unilaterally dropped the highest sale price of Rs 19,775 per sq metre from the matrix of the top three sales used by CALA to find the average price.

Interestingly, the property that was sold at Rs 19,775 per sq metre was resold for Rs 22,471 per sq metre at the time of arbitration. But Sajith Babu refused to consider it while arriving at the base price in February 2021.

After dropping the highest price, the new base price fell by 25% to Rs 10,229 per sq metre or Rs 4.14 lakh per cent.

Encouraged by Sajith Babu's order, the NHAI filed 367 petitions before the Kasaragod Collector seeking revision of base price, or 25% of all arbitration cases, said an official in the Collectorate.

"It was unprecedented in Kerala. No other district saw NHAI seeking to lower the base price after approving it," said M N Prasad, a businessman and victim of Sajith Babu's order.

Prasad's case is among those pending before the Additional District Court of Kasaragod.

Delivering the verdict in the temple's petition, Judge Unnikrishnan said that the Collector's "method" of rejecting the highest valued document and taking the average of the other five documents is against the mandate of Section 26 of the Right to Compensation Act which says the average clue of the highest valued three documents is to be taken into consideration while fixing the land value. "The award of the arbitrator appears on the face of the records that a patent illegality has been committed. Hence the award is vitiated," the judge ruled, setting aside Sajith Babu's order.

Successor dismisses NHAI's petitions
Sajith Babu's successor Bhandari Swagat Ranveerchand dismissed almost all the NHAI's arbitration cases filed from Kasaragod and Nileshwar villages seeking return of "excess" compensation and review of the base price already awarded.

In December 2021, she visited around 13 to 15 plots in Kasaragod and Nileshwar revenue villages that were used as references to calculate the base prices. She found that the base prices fixed by the CALA were lower than the rate of comparable plots.

Sanal C Hassan, stock market broker, said he also got a notice from NHAI to return a part of the compensation he received. "But the lady collector's order closed that chapter. Hope NHAI won't go for an appeal," he said.

But as an arbitrator, Bhandari could only reject NHAI's new petitions, not reverse the decisions taken by Sajith Babu. Those unlucky petitioners had to approach the court.

When contacted, NHAI's Project Director in Kannur Punil Kumar said the authority had not challenged valuation elsewhere other than Kasaragod. He did not explain why. "The numbers are minuscule," he said. Perhaps, yes. But their suffering is incalculable.

Disparity and delay
Amitha Kamath Murali, a resident of Nullipady in Kasaragod town, said she is on the brink of a debt trap. NHAI has taken over nearly 8 cents of prime commercial property but has not yet fully compensated her. "I took a loan and built a new complex expecting prompt compensation. But for more than a year, I have been paying EMI from my pocket," she said.

NHAI took over her land in three tranches, first, a three-cent, then half a cent, and lastly, 4.45 cents. For the first three cents, NHAI compensated her at Rs 13,776 per sq metre. For the half a cent, it awards her at the same rate but is asking her to return the "excess" amount. For the last tranche of 4.45 cents, it is planning to compensate her at Sajith Babu's rate of Rs 10,229 per sq metre. "They paid me 50% of the compensation and said the rest will be given later but without interest rate," said Kamath.

She has challenged the lowering of the base price in court and now moved another petition for interest on the delay. "How can NHAI have different rates for the same plot with the same survey number? Also, they should have taken the 8 cents together instead of causing inconvenience to me," she said.

Businessman Prasad said NHAI acquired 100 sq metres (2.47 cents) of commercial land owned by his mother Susheela Maniyani (74) at Anangoor in Kasaragod town. "She was earning around Rs 1 lakh as rent from the building. We had to demolish it but the delay in getting compensation cost us Rs 36 lakh," he said. She also had to take a bridge loan of Rs 8 lakh to service the loan on her original building.

Susheela Maniyani's plot was also acquired in two tranches, the bigger plot at Rs 14,994 per sq metres, and the second smaller plot at Rs 13,776 per sq metres.

Her son-in-law Pramod Krishna Kakkanath's 3.95 cents (160 sq metres) in the same locality was also acquired at two different rates. He was promised Rs 13,776 per sq metre for the bigger plot and Rs 14,994 for the smaller plot.

But NHAI is now ready to pay only the new rate of Rs 10,229 per sq metre. As their arbitration cases were getting delayed at the Collector's office, they moved to the High Court of Kerala seeking compensation.

The High Court directed the NHAI to give them 50% of the compensation at a reduced rate. Later, the arbitrator confirmed the reduced rate of Rs 10,229 per sq metre. "NHAI then released the remaining 50% at the reduced rate. By then, because of the inordinate delay, the money we got was just enough to clear the dues of the bank," said Prasad.

He said the delay in giving compensation was forcing many landowners burdened by debt to sell their prime properties. "The verdict won by the temple gives us hope of getting the full compensation. We expect the Additional District Court to take up our cases soon," said Prasad.

But Amitha Kamath Murali said she does not have much hope. "My case was scheduled in December. But it got adjourned to March. I don't know who will give us justice," she said.

'Cheating on interest'
Pundalika Shenoy, an executive committee member of the Sri Varadaraj Venkataramana Temple, said the Supreme Court the Kerala High Court, and several other courts in India have reiterated that NHAI should give interest on the solatium and well as the base price. "But we are being given interest only on the base price," he said.

He said the temple had raised the issue before the Additional District Judge. "But he asked us to approach the Arbitrator (Collector) as our petition is already pending before him," said Shenoy.

The courts have defined compensation as base price plus 100% solatium, which is given to landowners before their properties are "compulsorily acquired for purposes of National Highways".

The Ministry of Road Transport and Highways issued a 'Manual of Guidelines on Land Acquisition for National Highways' in 2018. In it, the then Attorney General K K Venugopal advised interest on solatium, Shenoy said.

Despite repeated judgments on interest in solatium, NHAI has been challenging it in lower courts. "The courts should put an end to it by holding the officials accountable," he said.