Ravikumar Properties Pvt. Ltd. v. State of Kerala, Represented By Its Chief Secretary, Secretariat
2026-05-20
P M Manoj
body2026
DailyLaw.ai
JUDGMENT : P.M.MANOJ, J. 1. The writ petition is preferred by two firms owned by one Ravikumar, whose properties were acquired for a public purpose pursuant to a notification published under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the LA Act’). However, during the pendency of the said proceedings, the Right to Fair Compensation and Transparency in Land Acquisition and Rehabilitation and Resettlement Act, 2013 (for short ‘LAAR Act, 2013’) came into force on 01.01.2024. In this regard, 50% of the compensation had already been paid prior to 01.01.2014, while the remaining compensation was paid only in the year 2018. According to the petitioner, he was compelled to execute agreements for sale in favour of the 5 th respondent Corporation, which, it is alleged, amounts to a fraud on the power of eminent domain, since neither the Constitution of India nor the special statute governing the acquisition provides for sale or negotiated purchase of property under acquisition. 2. In such circumstances, the petitioner seeks to quash Exts.P14 to P24 awards and to direct the respondents to redetermine the compensation in accordance with LARR Act, 2013. The petitioner also seeks to quash Exts.P38 and P39 on the ground that the said documents are in contravention of the LARR Act, 2013. Further, the petitioner seeks a declaration that Exts.P38 and P39 sale deeds were executed with the intention of curtailing just and fair compensation payable under the LARR Act, 2013, and are therefore null and void and violative of Articles 14, 21, 38, 39(a), and 300A of the Constitution of India. 3. It is the case of the petitioners that they are private limited companies represented by their Managing Director, who is a native of Pondicherry and, therefore, is not conversant with reading and writing Malayalam. The petitioners were the absolute owners and title holders in possession of 2.232 acres of land situated in Ernakulam Village, Kanayannur Taluk, Ernakulam District. The property lies as a single compact plot on the eastern side of M.G. Road, Ernakulam, having a frontage of 25 meters to M.G. Road, and is classified as dry land. 4. The petitioners contend that the subject properties are situated in a prime location in the State, as they lie on both sides of M.G. Road and possess significant commercial value.
4. The petitioners contend that the subject properties are situated in a prime location in the State, as they lie on both sides of M.G. Road and possess significant commercial value. The high commercial importance of the properties was expressly recognised by this Court in its judgment dated 13.03.2013 in W.P.(C) No.30355 of2012. 5. The petitioners further contend that the market value of properties on both sides of M.G. Road ranges between Rs.62 lakh and Rs.65 lakh per cent. In support of this, it is stated that a property in close proximity to the petitioners' land was purchased for Rs.65 lakh per cent in 2014. Similarly, a Mumbai-based company acquired a property situated 450 meters away for Rs.28 lakh per cent as far back as 1996. Furthermore, the petitioners point to a 10-cent plot on the northern side of S.A. Road, Ernakulam, which was sold in 2010 for Rs.35 lakh per cent, despite that area having significantly lower commercial value than M.G. Road. By citing these sale deeds and documents, the petitioners seek to establish the fair and prevailing market value of their own property. 6. A requisition for acquisition was submitted by the Cochin Corporation to the 1st Respondent (State) and the 3 rd respondent (District Collector) for the construction of the Atlantis Railway Overbridge at Thevara. Consequently, the 4 th respondent (Land Acquisition Officer) issued a notification under Section 4(1) of the LA Act, seeking to acquire an area of 65.386 Ares (161.568 Cents) for the said public purpose. The petitioner raised no objections, and following the notification, the Land Acquisition Officer published the Section 6(1) Declaration on January 6, 2013. A Basic Valuation Report (BVR) for the property was subsequently prepared on October 20, 2012. However, the petitioner alleges that despite the property being "pacca dry land”, it was erroneously classified as "wetland reclaimed to dry land" without M.G. Road frontage and was instead described as being accessible only through a specified access. 7. At the time of the Section 4(1) Notification, the subject properties were mortgaged in favour of M/s. Sundaram Finance, Chennai, and other nationalised banks. By 2012, the loans availed against these properties had fallen into arrears, and the accounts were classified as Non-Performing Assets (NPA), with a total outstanding liability of Rs.20 Crores. This financial standing was disclosed to the 4 th respondent (LAO) via Exhibit P12, issued by Sundaram Finance. 8.
By 2012, the loans availed against these properties had fallen into arrears, and the accounts were classified as Non-Performing Assets (NPA), with a total outstanding liability of Rs.20 Crores. This financial standing was disclosed to the 4 th respondent (LAO) via Exhibit P12, issued by Sundaram Finance. 8. The petitioners assert that the respondents exploited this vulnerable financial position by offering immediate compensation—to be paid within one month—contingent upon the execution of a sale agreement. Although the agreement was drafted in Malayalam, a language the petitioners do not understand, the petitioner contends that he was compelled by circumstances to sign the documents and forms provided by the LAO to ensure expeditious receipt of the funds. 9. Consequently, the petitioners executed an agreement dated July 15, 2013 (Exhibit P13), on the condition that the respondents would release 80% of the compensation within 15 days and the remaining 20% within one month. Following the execution of this agreement, the respondents released a total compensation of Rs.19,58,29,508/-, of which 50% was paid prior to January 1, 2014. 10. During the pendency of the acquisition proceedings, the LARR Act, 2013 came into effect on January 1, 2014. The petitioners contend that since the acquisition proceedings had not been completed by that date, they were entitled to compensation under the 2013 Act. It is further argued that Section 24 of the LARR Act is squarely applicable to this case. 11. The petitioners submit that the Land Acquisition Officer (LAO) was required to pass an award under the LA Act, 1894 prior to January 1, 2014; failing this, the respondents were legally bound to pass the award under the provisions of the 2013 Act. Instead, the petitioners allege they were compelled to sign the Exhibit P13 agreement after January 1, 2014—an act they claim is void ab initio and non est in the eyes of the law. They further assert that Exhibit P13 constitutes a "fraud on the power of eminent domain" committed by the State. 12. With the alleged intention of defeating the petitioners' statutory right to compensation under the 2013 Act, the LAO passed awards in various cases (LAC Nos. 13/2013 to 24/2013, marked as Exhibits P14 to P24) on various dates between 2015 and 2016. Notably, no award was passed in LAC No. 19/2013. The petitioners maintain that these awards directly contravene Section 24(1)(a) of the LARR Act, 2013. 13.
13/2013 to 24/2013, marked as Exhibits P14 to P24) on various dates between 2015 and 2016. Notably, no award was passed in LAC No. 19/2013. The petitioners maintain that these awards directly contravene Section 24(1)(a) of the LARR Act, 2013. 13. Based on these awards, a total sum of Rs.39,17,22,001/- was released, with the final payment being made on July 11, 2018, for a total acquired area of 163.41 cents. However, the petitioner claims that the respondents withheld the final payment, threatening not to release it unless the petitioner executed a sale deed in favour of the 5 th respondent. The petitioner’s continuous efforts to secure the balance compensation between 2013 and 2018 are documented in Exhibits P25 to P37. 14. The petitioner contends that he was kept in a state of uncertainty for four and a half years. Finding no other means to secure the compensation withheld by the State, he was ultimately forced to assent to the conditions and stipulations unilaterally imposed by the respondents. 15. Consequently, the respondents allegedly succeeded in compelling the petitioners to execute sale deeds (Exhibits P38 and P39) in favour of the 5th Respondent Corporation for the properties already covered under the Section 4(1) Notification, the Section 6(1) Declaration, and the awards (Exhibits P14 to P24). The petitioners argue that this constitutes a fraud on the power of eminent domain, as the authorities were well aware that the petitioners were entitled to significantly higher compensation under the LARR Act, 2013. Instead, through misrepresentation and the concealment of material facts, the respondents induced the petitioners to act to their own detriment. 16. It is further alleged that both the requisitioning and the acquisition authority exercised the power of eminent domain with dishonest and malicious intent. Invoking the legal definition of cheating—namely, dishonest inducement of a person to deliver property or valuable security—the petitioners assert that the State withheld 50% of the compensation for over five years. This delay was a calculated attempt to coerce the petitioners into executing an agreement and surrendering their property to the 5 th respondent. Ultimately, the petitioners contend that these acts were designed to deceive them, resulting in substantial monetary loss while facilitating the unlawful enrichment of the Cochin Corporation. They characterise this as a "State-sponsored case of cheating," perpetrated through illegalities that violate Articles 14, 21, 38, 39(a), and 300A of the Constitution of India. 17.
Ultimately, the petitioners contend that these acts were designed to deceive them, resulting in substantial monetary loss while facilitating the unlawful enrichment of the Cochin Corporation. They characterise this as a "State-sponsored case of cheating," perpetrated through illegalities that violate Articles 14, 21, 38, 39(a), and 300A of the Constitution of India. 17. It is further contended that a comparison under Section 40 reveals clear discrimination in the grant of compensation among similarly situated persons in the locality. Although the right to property is no longer a fundamental right, it continues to remain a constitutional right protected under Article 300A and cannot be taken away except by authority of law. In this regard, the petitioner contends that the LARR Act, 2013 is a beneficial legislation; specifically, Sections 11(4), 24, 40, 46, and 104 thereof are squarely applicable to the facts of this case. 18. To substantiate these contentions, the petitioners rely on Indore Development Authority v. Manoharlal and Others [ AIR 2020 SC 1496 ]. Under the provisions of Section 24(1)(a), if an award had not been made by the commencement of the 2013 Act (January 1, 2014), the proceedings do not lapse, but compensation must be determined under the 2013 Act. Accordingly, the solatium should be 100%, as stipulated in the 2013 Act, rather than the 30% provided under the 1894 Act. 19. Furthermore, the petitioners refer to Shanavas and Others v. State of Kerala and Others [ 2017 (4) KHC 148 ]. In that case, this Court observed that while the Government does not lose its power of eminent domain to purchase land through negotiation, the clear and distinct terminology of the 2013 Act makes it imperative for the Government to proceed under the new Statute to satisfy the mandate of Article 300A. 20. The petitioners argue that while the 1894 Act contained enabling provisions for "agreed purchases" and consequential awards, such provisions are conspicuously absent in the 2013 Act. This absence of power, coupled with the lack of rules enabling the State Government to resort to negotiated purchases, indicates a conscious legislative intent to prevent the State from bypassing the new Act to the disadvantage of landowners. Moreover, Section 64 of the 2013 Act provides landowners with the right to seek a reference if they are dissatisfied with the compensation—a statutory protection that overrides and takes precedence over any negotiated purchase. 21.
Moreover, Section 64 of the 2013 Act provides landowners with the right to seek a reference if they are dissatisfied with the compensation—a statutory protection that overrides and takes precedence over any negotiated purchase. 21. Although the aforementioned judgment was challenged before the Division Bench of this Court, the Bench declined to exercise its appellate jurisdiction. While a Special Leave Petition (SLP) against that decision is currently pending before the Hon’ble Supreme Court, the petitioners contend that there are distinct factual differences in the present case. 22. Here, the properties were taken into possession by the respondents in compliance with the provisions of the 1894 Act— specifically Sections 4(1) and 6(1)—and possession was indeed taken before January 1, 2014. However, the final awards were passed only after January 1, 2014. These specific facts were not present in the Shanavas case supra currently pending before the Apex Court. The petitioners argue that the sole reason the 2013 Act was not implemented at the time was the State’s failure to frame the necessary Rules under the new Act. In similar circumstances, this Court has previously ordered the surrender of land for public purposes subject to payment of enhanced compensation under the 2013 Act. 23. Relying on decisions rendered by the High Court of Telangana in Ittyreddy Mangava and Others v. State of Telangana and Others , (MANU/TL/0177/2020) and the Hon'ble Supreme Court in Rameshwar and Others v. State of Haryana and Others (2018 KHC 6182) and Uddar Gagan Properties v. Sant Singh and Others (2016 KHC 6363), counsel for the petitioner seeks to establish that the respondents’ actions constitute a "fraud on the power of eminent domain." 24. To define this fraud, the petitioners rely on State of A.P. and Others v. T. Suryachandra Rao (2005 KHC 1262) Bhaurao Dagdu Paralkar v. State of Maharashtra (2005 KHC 1429) and Shrisht Dhawan v. Shaw Bros (1992 KHC 772). Fraud is defined as an act of deliberate deception designed to secure an unfair advantage over another. It is a deception practised to gain at another's loss; in essence, it is cheating intended to secure an unlawful advantage. 25. According to the petitioner, fraud is established when it is shown that a false representation has been made: (1) knowingly, (2) without belief in its truth, or (3) recklessly and carelessly as to whether it be true or false.
25. According to the petitioner, fraud is established when it is shown that a false representation has been made: (1) knowingly, (2) without belief in its truth, or (3) recklessly and carelessly as to whether it be true or false. These contentions were countered by the4 th respondent in an affidavit dated November 28, 2019. 26. In the counter-affidavit, it was admitted that the petitioners' property was acquired at the request of the Cochin Municipal Corporation for the construction of the Atlantis Junction Railway Overbridge. The respondents maintain that the proceedings were initiated under the LA Act, which was the prevailing legislation at the time. Furthermore, the "emergency clause" was invoked upon the request of the requisitioning authority. 27. Accordingly, the Section 4(1) Notification was published in the Official Gazette of Kerala on August 14, 2012, followed by the Section 6(1) Notification on January 4, 2013. The respondents contend that the lands were acquired under Section 11(2) through a negotiated settlement reached during a District Level Purchase Committee (DLPC) meeting on November 13, 2012, to which the petitioners were duly invited. 28. The 4 th respondent further disputes the petitioners’ claim regarding road frontage, asserting that the acquired land has no direct frontage on M.G. Road. According to the Basic Tax Register (BTR), the lands in Survey Nos. 2389/1, 3, 5, and 6 are recorded as 'Nilam' (wetland), while Survey Nos. 2389/2 and 4 are recorded as 'Purayidom' (dry land). The respondents state that although the 'Nilam' portions were found to have been converted at the time of inspection, the draft declaration correctly remarked them as "Nilam now reclaimed as Purayidom." It is further stated that, as per the survey records, Survey Nos. 2383/2 and 4 are narrow strips of land (0.30 Ares and 05.67 Ares, respectively) separating the wetland. Consequently, based on its physical location, the property was categorized as Category IV: "Wetland now reclaimed to dry land, lying interior near to M.G. Road." 29. The primary thrust of the 4th Respondent's argument is that the property was acquired through negotiation under Section 11(2) of the LA Act. They contend that the petitioners accepted the price fixed by the District Level Purchase Committee (DLPC)—chaired by the District Collector—and voluntarily signed the agreement in Form 10(a) under Rule 12(5) of the Land Acquisition (Kerala) Rules, 1990.
The primary thrust of the 4th Respondent's argument is that the property was acquired through negotiation under Section 11(2) of the LA Act. They contend that the petitioners accepted the price fixed by the District Level Purchase Committee (DLPC)—chaired by the District Collector—and voluntarily signed the agreement in Form 10(a) under Rule 12(5) of the Land Acquisition (Kerala) Rules, 1990. Subsequently, the petitioners accepted the full compensation from the4 th respondent and executed the formal sale deeds. 30. The respondents argue that under the conditions of the Form10(a) agreement, there is no provision for seeking a court reference or any revision of the land value. Consequently, they maintain that the value accepted by the petitioners is final and cannot be reviewed. Furthermore, the Basic Valuation Report (BVR) was prepared based on documents executed three years prior to the Section 4(1) Notification. Therefore, the petitioners' reliance on Exhibits P3 to P5, which post-date the Section 4(1) Notification, is legally untenable. 31. Following the Section 4(1) Notification, the BVR was prepared by the Land Acquisition Officer (LAO) and approved by the District Collector on October 20, 2012. Due to a disagreement regarding the initial valuation, the LAO forwarded the files to the District Collector to initiate negotiated purchase proceedings under Section 11(2). During the DLPC meeting attended by the petitioners, the land value was increased from Rs.33,64,761/- per Are to Rs.59,79,820/- per Are. The respondents assert that the petitioners raised no objections, signed the Form 10(a) sale agreement, and handed over possession of the land on June 29, 2013. 32. Upon approval from the State Level Empowerment Committee (SLEC), 50% of the agreed amount was released. After the award was passed, the sale deeds were executed under the Registration Act in favour of the Secretary, Cochin Municipal Corporation. The respondents contend that since the land was transferred via a negotiated price agreed upon by both parties, it does not constitute a "compulsory acquisition." Therefore, they argue that Section 24 of the LARR Act, 2013 is inapplicable. 33. Finally, it is stated that awards were passed in all cases (except LAC 19/15) based on the SLEC rates and the Form 10(a) agreements. These payments did not include solatium or other statutory benefits, as the acquisition was treated as a voluntary negotiation rather than a compulsory one.
33. Finally, it is stated that awards were passed in all cases (except LAC 19/15) based on the SLEC rates and the Form 10(a) agreements. These payments did not include solatium or other statutory benefits, as the acquisition was treated as a voluntary negotiation rather than a compulsory one. Regarding LAC No. 19/15, the balance amount was disbursed to the petitioners via proceeding No. C20/11 dated June 6, 2018. 34. In light of these circumstances, the respondents contend that the prayers sought in the Writ Petition cannot be granted. They argue that the Basic Valuation Report (BVR) is inapplicable here, as the transfer of property was concluded based on a rate negotiated and mutually agreed upon by the parties. The agreement itself categorically stipulates that the owners and interested parties shall not claim any amount in addition to the agreed compensation, which was accepted without protest. 35. The respondents acknowledge the petitioners' statement that the lands were mortgaged to several financial institutions and that the petitioners were facing a severe financial crisis. They contend that under existing laws, there is no provision to sell land while it remains encumbered by mortgages. Consequently, the petitioners failed to clear their arrears in a timely manner. The registration of the sale deeds in favour of the Secretary of the Municipal Corporation was delayed due to these factors, for which the respondents are not responsible. Even after a lapse of four years, the petitioners approached the respondents to register the sale deeds, and the balance amount was released upon registration; thus, there was no wilful delay on the part of the State. 36. Furthermore, it is argued that Section 24(1) of the LARR Act, 2013 is inapplicable to the facts of the present case. Since the land value was settled through negotiation at the DLPC and the petitioners signed the Form 10(a) agreement under the relevant rules, they have waived their right to file Land Acquisition Reference (LAR) petitions. The respondents maintain that the property was legally transferred only after the execution of the sale deeds (Exhibits P38 and P39). At the time of signing, the petitioners never raised any claims under the2013 Act. 37. The respondents further submit that the 2013 Act does not prohibit the execution of sale deeds.
The respondents maintain that the property was legally transferred only after the execution of the sale deeds (Exhibits P38 and P39). At the time of signing, the petitioners never raised any claims under the2013 Act. 37. The respondents further submit that the 2013 Act does not prohibit the execution of sale deeds. They argue that proceedings under the Land Acquisition Act and a voluntary sale are two distinct legal tools: one involves an element of compulsion, while the other is based on voluntary consent. Under the Transfer of Property Act, the State can purchase property from individuals without fetters. This position was considered by a Division Bench in W.A. No. 2466/2017, which noted that the authority of the State to contract for the purchase of property is a distinct matter. Although an SLP is pending and the operation of that judgment has been stayed by the Apex Court, the respondents maintain that the present Writ Petition is devoid of merit and liable to be dismissed. 38. I have heard Sri. T.R.S. Kumar, learned counsel for the petitioners, Sri.Jaffer Khan Y, learned Govt. Pleader for the respondents 1 to 4 and Sri.D.G.Vipin, Standing Counsel for the 5 th respondent. 39. The following questions are framed for consideration in this case: 1. Whether the awards (Exhibits P14 to P24), passed under the Land Acquisition Act, 1894, after January 1, 2014, are legally sustainable in view of the transitional provisions contained in Section 24 of the LARR Act, 2013. 2. Whether mortgaged properties can be validly transferred through a negotiated agreement—specifically a Form 10(a) agreement under Rule 12(5) of the Land Acquisition (Kerala)Rules, 1990—as contended by the respondents. 3. Whether the sale deeds (Exhibits P38 & P39) executed on June7, 2018, are legally valid and sustainable, considering that possession of the land had already been surrendered on June29, 2013. 4. Whether the actions of the respondents in this matter constitute a "fraud on the power of eminent domain." While evaluating the contentions to answer the first issue, it is primarily necessary to consider the dates on which the awards were passed by the 4 th respondent. 40. A review of Exhibits P15 to P24 awards (concerning LAC Nos. 14 to 24/2013, excluding 19/2013) shows that they were passed between June 23, 2015, and November 21, 2016.
40. A review of Exhibits P15 to P24 awards (concerning LAC Nos. 14 to 24/2013, excluding 19/2013) shows that they were passed between June 23, 2015, and November 21, 2016. The land acquisition proceedings were initiated via a Section 4(1) Notification on August 14, 2012, followed by a Section 6(1) Declaration on January 6, 2013. During the pendency of these proceedings, the LARR Act, 2013 came into force with effect from January 1, 2014. 41. The relevant portion of Section 24 of the LARR Act, 2013 reads thus: " 24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases. (1)Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,- (a)where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or (b)where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
(2)Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act: Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act." The Proviso to Section 24 further stipulates that where an award has been made, but compensation in respect of the majority of landholdings has not been deposited into the accounts of the beneficiaries, then all beneficiaries specified in the Section 4 Notification shall be entitled to compensation in accordance with the provisions of the LARR Act, 2013 42. This issue was addressed by the Hon’ble Supreme Court in its landmark judgment in Indore Development Authority (supra) The Apex Court clarified that if an award was not made as of January 1, 2014 (the date of commencement of the 2013 Act), the proceedings do not lapse; however, compensation must be determined under the provisions of the 2013 Act. Furthermore, the Court clarified that solatium under the 2013 Act is 100%, as opposed to the 30% stipulated under the 1894 Act. 43. In the present case, although the land acquisition proceedings were initiated on August 14, 2012, the awards were not passed until 2015 and 2016. Consequently, it is established that no award had been passed prior to the commencement of the LARR Act, 2013. Following the principles clarified by the Hon’ble Supreme Court in Indore Development Authority (supra), the compensation in this matter must be determined under the provisions of the 2013 Act. The first issue is, therefore, answered in the affirmative: the awards passed under the 1894 Act after January 1, 2014, are not legally sustainable. 44.
Following the principles clarified by the Hon’ble Supreme Court in Indore Development Authority (supra), the compensation in this matter must be determined under the provisions of the 2013 Act. The first issue is, therefore, answered in the affirmative: the awards passed under the 1894 Act after January 1, 2014, are not legally sustainable. 44. The second issue concerns the status of mortgaged properties in acquisition proceedings, is addressed by Rule 12(5) of the Land Acquisition (Kerala) Rules, 1990, mandates that the agreement shall be executed in Form 10(a) between the owner(s) or "any person or persons interested therein" on the one part, and the District Collector, acting on behalf of the State of Kerala on the other. 45. From this provision, it is discernible that mortgaged property can be validly acquired and effectively transferred to the Government under land acquisition proceedings. However, such proceedings cannot overlook the mortgage; rather, the mortgagee's interest must be protected. This protection extends to the compensation amount, as Rule 12(5) stipulates that the Form 10(a) agreement must be executed not only by the owner but also by "any person or persons interested in the land". 46. The expression "person interested" is an inclusive term intended to encompass mortgagees, charge-holders, and other encumbrancers. Consequently, the mere existence of a mortgage does not prevent acquisition. Once the Government takes possession, the land vests in the State free of all encumbrances. The mortgage is not extinguished without recourse; instead, the mortgagee becomes a "person interested" with a primary claim toward the compensation. 47. In the present case, a review of the facts—specifically Exhibit P12—reveals that M/s. Sundaram Finance had formally addressed the 4 th respondent, intimating their subsisting interest in the acquired property and requesting that the compensation be disbursed directly to them. Consequently, for any agreement signed as part of an award under Form 10(a), the said financier was a necessary party thereto. 48. However, neither the awards nor the accompanying Form10(a) agreements disclose the involvement of the "person interested," namely M/s. Sundaram Finance. Accordingly, the question of the validity of those specific agreements is left open for further adjudication due to the lack of sufficient evidentiary materials presently available on record. 49. Regarding the 3rd issue, validity of the sale deeds marked as Exhibits P38 and P39, executed on August 7, 2018, it is necessary to consider the legal status of a property owner during acquisition.
49. Regarding the 3rd issue, validity of the sale deeds marked as Exhibits P38 and P39, executed on August 7, 2018, it is necessary to consider the legal status of a property owner during acquisition. Once land acquisition proceedings are initiated, the status of the landowner undergoes a gradual but legally significant transformation. Ownership is not divested immediately; rather, it is a process marked by distinct stages: 1. Issuance of Section 4(1) Notification: At this stage, the landowner continues to remain the legal owner and is entitled to the possession, use, and enjoyment of the land, albeit subject to certain statutory restrictions on its transfer or further development. The transition of a landowner from an absolute owner into a claimant for compensation occurs through the following legal stages: 1. Restriction of Rights following Notification: • Restriction on Alienation: Once the Section 4(1) Notification is issued, the landowner's right to freely transfer or alienate the property becomes restricted. • Limitation on Improvements: The land is officially marked for a public purpose; any subsequent improvements or alterations may not be considered for compensation unless they are proven to be bona fide. 2. Procedural and Participatory Rights: • Right to Object: The landowner acquires the procedural right to file objections as contemplated under Rule 8 of the Land Acquisition (Kerala) Rules, 1990. • Right to be Heard: The owner is entitled to be heard during the acquisition proceedings to ensure due process. • Right to Fair Compensation: The owner gains the legal standing to demand that compensation be determined according to statutory mandates. 3. Status after Declaration and Award: • Conversion of Interest: Once the Section 6 declaration is made and an award is passed, the landowner’s proprietary interest is legally converted into a right to receive compensation. • Enforceable Claims: The quantum of compensation, solatium, and other statutory benefits become an enforceable legal right. 4. Vesting of Land upon Possession: • Absolute Vesting: Upon the state taking physical possession, the land vests absolutely in the State, free from all encumbrances. • Cessation of Proprietary Rights: The landowner ceases to have any proprietary right over the land. • Change in Legal Status: The individual’s status shifts from "owner" to a "person interested" entitled to compensation. 5.
Vesting of Land upon Possession: • Absolute Vesting: Upon the state taking physical possession, the land vests absolutely in the State, free from all encumbrances. • Cessation of Proprietary Rights: The landowner ceases to have any proprietary right over the land. • Change in Legal Status: The individual’s status shifts from "owner" to a "person interested" entitled to compensation. 5. Residual Rights post-Vesting: • Right to Challenge: Even after vesting, the former owner may challenge the acquisition proceedings on limited grounds, such as illegality, procedural violations, or lack of a public purpose. • Enhanced Compensation: The former owner retains the statutory right to seek enhanced compensation through a reference to the competent court (Section 64 of the LARR Act, 2013). 6. Residual Rights Even After Vesting: • Right to Challenge: The former landowner may challenge the acquisition proceedings on limited grounds, such as illegality, significant procedural violations, or the lack of a legitimate public purpose. • Right to Enhanced Compensation: The individual retains the statutory right to seek an enhancement of the compensation amount through a reference to the competent court. 50. Based on the aforementioned general principles, it is evident that once land acquisition proceedings are initiated, the rights of the property owner are progressively restricted. Once physical possession of the property has been surrendered or taken over by the State, the erstwhile owner is legally divested of the capacity to enter into agreements to transact or alienate the property through standard civil formalities. 51. In the present case, possession of the land was handed over on June 29, 2013. However, Exhibits P38 and P39 agreements, executed alongside Form 10(a) under Rule 12(5), were signed only on June 7, 2018. Consequently, on the date of execution, the signatory—the Managing Director of the petitioner companies—was legally incapacitated from transferring the property, as the companies no longer held absolute ownership. 52. Under the provisions of the Transfer of Property (TP) Act, only a person with clear, uninterrupted ownership and title may validly transact property. As this essential element of ownership was absent at the time of execution, Exhibits P38 and P39 are legally unsustainable and shall be deemed void ab initio. 53. Finally, it must be determined whether there has been a fraud on the power of eminent domain.
As this essential element of ownership was absent at the time of execution, Exhibits P38 and P39 are legally unsustainable and shall be deemed void ab initio. 53. Finally, it must be determined whether there has been a fraud on the power of eminent domain. In order to address the said issue, it becomes necessary first to examine the meaning and scope of the expression "power of eminent domain." Eminent domain refers to the inherent power of the State to compulsorily acquire private property for a public purpose, subject to the payment of just compensation. In the Indian legal context, this power is exercised within the constitutional limitations prescribed under Article 300A of the Constitution, which mandates that no person shall be deprived of their property save by authority of law. 54. In this case, the allegation concerns a "fraud on power." In administrative law, "fraud" in this context does not necessarily imply ordinary deceit or dishonesty; rather, it refers to a misuse or abuse of statutory power. An exercise of power is considered as a fraud on eminent domain when: • Pretext of Public Purpose: The State purports to acquire land for a public purpose, but the acquisition is, in reality, for private gain or an extraneous/collateral objective. • Colourable Exercise of Power: The action appears lawful on its face but is actually performed to achieve an improper or unauthorized end. Key Elements of Fraud on Eminent Domain: • Absence of a Genuine Public Purpose: The stated objective is a mere facade. • Mala Fide Intention: The presence of a collateral motive or bad faith. • Disproportionate Private Benefit: The acquisition primarily benefits a private party rather than the general public. • Procedural Manipulation: A lack of independent application of mind or the deliberate subversion of statutory procedures. Applying these elements, a fraud on eminent domain is made out when property is acquired under the pretext of public utility but is subsequently diverted to provide an undue advantage to private parties through the violation of procedural formalities. 55. In the present case, the property was acquired for the construction of the Atlantis Railway Overbridge at Thevara. The requisitioning authority was the Cochin Municipal Corporation, and the District Collector appointed the Land Acquisition Officer (4th Respondent) to oversee the process. 56.
55. In the present case, the property was acquired for the construction of the Atlantis Railway Overbridge at Thevara. The requisitioning authority was the Cochin Municipal Corporation, and the District Collector appointed the Land Acquisition Officer (4th Respondent) to oversee the process. 56. Following the statutory procedure, the 4 th respondent issued the Section 4(1) Notification, and after the completion of the survey, the Section 6(1) Declaration was effected. Subsequently, a Basic Valuation Report (BVR) was prepared. However, prior to the passing of the award under Section 11, the petitioners signed Form 10(a) agreements under Rule 12(5) on July 15, 2013. A portion of the compensation was disbursed to the petitioners before January 1, 2014, in relation to LAC Nos. 13–18 and 20–24 of 2013. 57. Notably, the final awards for these cases were passed much later, specifically between June 2015 and November 2016. Regarding LAC No. 19/2013, the Exhibits P38 and P39 agreements were executed for the disbursal of the remaining compensation. The petitioners contend that because the awards were not passed under the 1894 Act before the transition to the 2013 Act, they were essentially compelled to sign these agreements to receive their remaining funds. They argue that this procedural conduct constitutes a "fraud on the power of eminent domain." However, based on the legal standards defining such fraud, the procedure followed by the respondents in this acquisition cannot be termed a "fraud on the power of eminent domain." The acquisition served a legitimate public purpose, and the procedural delays do not meet the threshold of mala fide intention or a colourable exercise of power. Consequently, this contention is discarded. 58. In light of the foregoing, the Writ Petition is disposed of. Exhibits P13 to P24, as well as Exhibits P38 and P39, are hereby set aside for the reasons detailed in the adjudication of the issues framed above. This order is passed with the intent to grant the petitioners the benefits mandated under Section 24 of the LARR Act, 2013. Accordingly, the respondents are directed to redetermine the compensation in accordance with the provisions of the 2013 Act and disburse the balance amount to the petitioners after deducting the payments already made. The entire exercise shall be completed within a period of three months from the date of receipt of a certified copy of this judgment.