Right of State Authority to Acquire LandProcedure for Acquiring land

Right to property is not absolute.

Right always regarded as being subject to eminent domain, an inherent right of the state, an essential incident of the state sovereignty.

This means taking private property for public use.

Right of Eminent domain to exercise its power is subject to two essential conditions: (i) private property is to be taken only for public use; and (ii) fair & just compensation paid for the property taken.

Property acquired by state against the will of landowner.

Encroachment on right to property.

Can be done in public interest and not for any private interest

(1)No person shall be deprived of property save in accordance with law.

(2)No law shall provide for the compulsory acquisition or use of property without adequate compensation.

Land Acquisition is essential to balance rights of the State vs Private property owners.

Recognised in ancient authorities as Magna Carta 1215 where it was expounded that, no freeman shall be disseized or divested of his freehold and that no man shall be disinherited nor put his franchises or freehold, unless he be duly brought to answer, and be fore-judged by course of law

The constitutional provision in the USA is the fifth amendment of the constitution which runs as follows: No person shall be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation.

USA provision requires: (i) procedural safeguards; (ii) a reasonable law fulfilling the requirements of due process; (iii) acquisition be made only for public use; and (iv) just compensation. The word 'taken' in the above provision has been interpreted broadly. It does not necessarily mean that possession or ownership of property should always vest in the government.

If regulation of property goes too far, it may be regarded as 'taking' and compensation may become payable for the same. In the USA, the question of compensation is justifiable as it is a matter of a constitutional guarantee. The court can rule that compensation payable is not just for 'taking' property. Of all the constitutions, the US constitution gives the best guarantee to private property from government interference.

In India, art 300A provides: No person shall be deprived of his property save by authority of law

Art 300A signifies that before a person can be deprived of his property, there should be a law authorizing such deprivation.

This is a basic principle of democracy that no person can be deprived of his property without the authority of a valid law. A person cannot be deprived of his property merely by an executive order which has no legal basis. Further, the term 'law' in art 300A does not mean merely a law made by a legislature; it means a 'fair and reasonable' law.

LAA has two main parts: (i) acquisition of property (ii) assessment of compensation to landowner

LAA has both substantive as well as procedural provisions.

Both are important to ensure that there is no abuse of power in matter of acquisition of property.

Charanjit Lal Chowdhury v The Union of India [1951] 38 AIR S.C.41, BK Mukherjee J.,

It is a right inherent in every sovereign to take and appropriate private property belonging to individual citizens for public use. This right, which is described as eminent domain, in American law, is like the power of taxation, an offspring of political necessity and it is supposed to be based upon an implied reservation by Government that property acquired by its citizens under its protection may be taken or its use controlled for public benefit irrespective of the wishes of the owner.

Charanjit Lal referred in S.Kulasingam v Commissioner of Lands, Federal Territory &Ors. [1982] 1 MLJ 204.

lays down purposes for which private property can be acquired. Provision, before 13 September 1991, was as follows:

State Authority may acquire any land which is needed - (a)for any public purpose; or (b)by any person or corporation undertaking a work which in the opinion of the State Authority is of public utility; or (c)for the purpose of mining or for residential, agricultural, commercial or industrial purposes

Amended s 3 of LAA & inserted a new clause replacing 3(b).

Now s 3(b) reads: (b) by any person or corporation for any purpose which in the opinion of the State Authority is beneficial to the economic development of Malaysia or any part thereof or to the public generally or any class of the public;

NEW provision, s 68A, has been added to LAA.

Where any land has been acquired under this Act, whether before or after the commencement of this section, no subsequent disposal or use of, or dealing with, the land, whether by the State Authority or by the Government, person or corporation on whose behalf the land was acquired, shall invalidate the acquisition of the land.

Section 3(b), added in 1991, is harsh, vague and with wide scope and range.

Under s 3(b), land may be acquired for a person or a corporation and not by the government for itself, and for a purpose which 'in the opinion' of the state authority is beneficial to the economic development of Malaysia or any part thereof or to the public generally or any class thereof.

'economic development' is not defined.

Questionwhy, in such a case, should not land be acquired by concerned person through negotiations with the landowner and why should state machinery of acquisition be mobilized for a private, profitable, commercial venture?

Not possible if landowner refuses to sell on grounds of sentimental value etc. cannot compel landowner to sell the land.

not defined in Act.

SC of India in Bajirao T Kote v State of Maharashtra (1995) 2 SCC 442 defined public purpose.

Public purpose is not capable of precise definition. Each case has to be considered in the light of the purpose for which acquisition is sought for. It is to serve the general interest of the community as opposed to the particular interest of the individual. Public purpose, broadly speaking, would include the purpose in which the general interest of the society as opposed to the particular interest of the individual is directly and vitally concerned.

The expression public purpose is incapable of a precise definition. It is still best to hold a common sense test, that is, to see whether the purpose serves the general interest of the community; per Hashim Yeop Sani J in Kulasingam & Anor v Commissioner of Land, Federal Territory & Ors [1982] 1 MLJ 204

Generally, the executive would be the best judge to determine whether or not the impugned purpose is a public purpose. Yet, it is not beyond the purview of judicial scrutiny. Sir George Jessel MR said that public benefit must involve a direct benefit. The question whether a particular thing is in the public interest is a question of the times and is a question of fact (cf Re Amalgamated Anthracite Collieries Ltds Application (1927) 43 TLR 672

Syed Omar bin Abdul Rahman Taha Alsagoff and Anor. v Govt of Johore [1979] 1 MLJ 49Appellant challenged acquisition proceedings as null & void As land acquired wasnot meant for public purposeCt- S.8(3) LAA conclusive evidence of purpose of acquisition

Beneficial to the economic development of Malaysia or any part thereof or to the public generally or any class of the public. These words are wide and encompass a host of activities not merely restricted to undertakings of works which are of public utilities. The purpose can be anything as long as it is in the opinion of the State Authority economically beneficial to the country, the State or to the public or any class of public;

Honan Plantations SB v Kerajaan Negeri Johor & Ors.[1998] 5 MLJ 129 (HC). decision of High Court to strike out the claim for disclosing no reasonable cause of action was overruled by Court of Appeal in [1998]2 MLJ 498 based on the construction of s 8 (3)

The questions whether a specific acquisition is 'beneficial' and is for 'economic development' are left to the subjective discretion of the state authority, as the words 'in the opinion of' indicate.

If term 'economic development' is given a broad meaning, then every commercial activity undertaken by a non-governmental body for its own profit may fall within scope of this term.

Any purpose - It is not necessary for state authority to confine acquisition of land to purposes which come under one head only;

see Yew Lean Finance Development (M) Sdn Bhd v Director of Lands and Mines, Penang [1977] 2 MLJ 4.

Only State Authority can acquire land

Town and Country Planning Act 1976Electricity Act Street, Drainage & Building Act Civil Aviation Act.But the acquisition procedure must follow the LAA 1960.

Land held under Mining Lease or certificate or Temporary Occupation License cannot be acquired since such land does not confer ownership mere possession.

Ownership is vested in State Authority.

Interested Persons - S.2(1) LAA 1960

Land Acquisition Act 1960

s4 Preliminary notice(1) Whenever the State Authority is satisfied that any land in any locality in the State is likely to be needed for any of the purposes referred to in section 3 a notification in Form A shall be published in the Gazette.

notification under s.4 is notice to public at large that certain land in a particular locality in the state is likely to be needed for any of the purposes referred in s.3 and with that, preliminary investigation and survey of the land will commence under this section; see Hong Lee Trading & Construction Sdn Bhd v Taut Ying Realty Sdn Bhd [1991] 1 MLJ 250 at 251.

State Director may by written authority in Form B generally or specifically authorize any officer or person, together with servants and workmen, to enter upon any land in any locality specified in a notification published under s.4, and to do work specified in the Form.

(1) Where any person authorized under section 5(1) causes damage to any land entered upon he shall as soon as possible compensate the occupier for all such damage.

When any lands are needed for purposes in s.3 Land Administrator shall prepare and submit to the State Authority

S.7 Preparation of plan & list of lands(a) a plan of the whole area of such lands, showing the particular lands, or parts thereof, which it will be necessary to acquire; and(b) a list of such lands, in Form C

For convenience of state government (Syed Omar Alsaggoff & Anor v State of Johore [1975] 1 MLJ 241 at 244; Yew Lean Finance Development (M) Sdn Bhd v Director of Lands & Mines, Penang [1977] 2 MLJ 45).

(1) When the State Authority decides that any of the lands referred to in s.7 are needed for any purpose referred in s.3, a declaration in Form D shall be published in the Gazette.

(3) A declaration in Form D shall be conclusive evidence that all the scheduled land referred to therein is needed for purpose specified.

state authority is bound by rules of natural justice

see Goh Seng Peow & Sons Realty Sdn. Bhd. v The Collector of Land Revenue, Wilayah Persekutuan [1986] 2 MLJ 395.

Date of gazetting of Declaration is not to be taken as effective date of acquisition.

Declaration is merely an announcement that State Authority has decided that land concerned is needed for purpose referred in s 3 LAA.

Date when acquisition is deemed to have been effected should make a memorial in respect of scheduled land to vest same in State Authority, and accompanied by taking of formal possession of land concerned

Malakoff Bhd & Anor v Pentadbir Tanah, Kedah [2000] 2 MLJ 140

The provision clearly provides that the declaration in Form D is conclusive as to the purpose for which the scheduled lands are required which would mean that Parliament has decided that the State Authority is the best judge to determine what amounts to a purpose which is beneficial to economic development; see Honan Plantations Sdn Bhd v Kerajaan Negeri Johor & Ors [1998] 5 MLJ 129.

Land Administrators Inquiry

Content of the awardApportionment of the awardFinality of the award

First Schedule of LAA 1960

Market Value

No definition in LAATherefore, must rely on the meaning as interpreted by courts

Market ValueHoe Guan Investment v Collector of Land Revenue, Batu Pahat [1978] 2 MLJ 115 at p.118 the price that a owner willing and not obliged to sell might reasonably expect to obtain from a willing purchaser with whom he was bargaining for the sale and purchase of the land.

Fixing a price acceptable only to the Purchaser is not an assessment of market value see Yeow Tiong Kok v Collector of Land Revenue Port Dickson [1970] 1 MLJ 116 at p.119 Nagappa Chettiar & Ors v Collector of Land Revenue [1971] 1 MLJ 59 at p.60 Wan Sulaiman J. the safest guide to determine the fair market value is the evidence of sales of the same land or similar land in the neighbourhood.

BettermentSeverance damageInjurious affectionDisturbance claimsIncidental expensesAccommodation works