6% Minimum Interest For Any Refund As Kerala High Court Clears Land Acquisition For Wayanad Rehabilitation And Directs Compensation Sharing Between Plantation Companies
Isabella Mariam
The High Court of Kerala Division Bench of Justice A. Muhamed Mustaque and Justice Harisankar V. Menon disposed of a writ appeal and three connected writ petitions arising from a dispute over compensation for land acquired under the Disaster Management Act for rehabilitating victims of the 2024 Wayanad landslide. The proceedings, initiated by two plantation companies, concerned the adequacy and apportionment of the compensation already deposited by the State. The Court directed release of the balance amount to the appellant after a joint affidavit is filed detailing how the compensation is to be shared, and confirmed that any refund due if the State’s title claim succeeds must carry interest of not less than six percent. The parties were permitted to seek enhanced compensation through appropriate civil remedies.
The matter arises from proceedings involving two plantation companies that held adjoining large tracts of land in Wayanad. Following the 2024 landslide, the State invoked provisions of the Disaster Management Act to take possession of portions of these properties for rehabilitation measures. Compensation was initially assessed by the authorities, and a revised figure was later determined by the Court and deposited before the Registrar.
The companies contended that the compensation process was inadequate and disputed the manner in which the extent of the acquired land was calculated. One company maintained that the assessment failed to reflect the correct valuation, while the other asserted that its ownership over part of the land was not fully accounted for. Both entities submitted supporting records, including sale deeds, tax receipts, statements of admitted liabilities, payment details to workers, and security bonds executed pursuant to earlier court directions.
The State placed reliance on official memoranda, communications from the District Collector and Land Revenue Commissioner, minutes of meetings, gazette notifications, and government orders. It also informed the Court that a civil suit had been instituted seeking a declaration of title over the entire property, asserting that the land in question formed part of State land.
The Court observed that “the only issue that now remains for consideration is the protection of the State’s interest, since it has already disbursed more than ₹44 crores, and the manner in which such interest should be safeguarded in the event the suit is decreed in favour of the State.” It recorded that two distinct companies were before the Court and that “both companies are represented by the same Managing Director.”
Referring to the Single Judge’s judgement, it stated that compensation must be determined under the LARR Act, noting that “the learned Single Judge had directed that compensation be calculated in accordance with the provisions of the… LARR Act, 2013, though the present acquisition was not made under that statute.”
On the State’s concerns, the Bench recorded: “The learned Advocate General has submitted that, in the event the suit is decreed in favour of the State, M/s. Elstone Tea Estates Ltd. will be bound to refund the amount received, together with interest.” It noted the company’s undertaking, stating that “M/s. Elstone Tea Estates Ltd. has executed a bond undertaking to pay interest at the rate of 6%.”
Regarding disputes between the two companies, the Court observed: “if M/s. Padhoor Plantations Pvt. Ltd. has any claim in respect of the land now taken over from M/s. Elstone Tea Estates Ltd., it is a matter that can be resolved between the same companies, as both of them are before this Court.” It further recorded that “if any land beyond the extent of 64.4075 hectares is taken over, the company would be entitled to make an independent claim in that regard.”
On the right to enhanced compensation, the Court stated that “if the compensation now awarded is found to be below the market value as contemplated under the LARR Act, 2013, both the companies shall be at liberty to seek appropriate relief for enhanced compensation before a competent civil court.”
Regarding release of funds, it recorded that “the balance amount presently lying with the Registry shall be released to the appellant… only after receipt of the joint affidavit as directed above.” It also directed the Registry to ensure execution of security bonds, stating that “The Registry shall ensure that a bond is executed for the entire amount covered by this judgment prior to release.”
The Court further observed that disputes regarding internal apportionment “must be settled between themselves, and no further claim shall lie… unless it is established that the acquisition exceeded the extent of 64.4075 hectares.”
The Court directed that “the appellant, M/s. Elstone Tea Estates Ltd. shall be entitled to compensation determined in accordance with the provisions of the LARR Act, 2013, for the land taken by invoking the provisions of the DM Act, 2005. If the compensation now awarded is found to be below the market value as contemplated under the LARR Act, 2013, both the companies shall be at liberty to seek appropriate relief for enhanced compensation before a competent civil court.”
“The balance amount presently lying with the Registry shall be released to the appellant, M/s. Elstone Tea Estates Ltd.” but added that “both M/s. Elstone Tea Estates Ltd. and M/s. Padhoor Plantations Pvt. Ltd. shall file a joint affidavit before this Court indicating the apportionment of the compensation amount between them. The Registry shall release the balance amount to M/s. Elstone Tea Estates Ltd. only after receipt of the joint affidavit as directed above.”
“The Registry shall ensure that a bond is executed for the entire amount covered by this judgment prior to release. The State shall be at liberty to seek interest at a higher rate if the suit is decreed in its favour” and that “the civil court shall not award interest at a rate lower than 6%.”
“Individual claims of the companies concerning compensation must be settled between themselves, and no further claim shall lie by M/s. Padhoor Plantations Pvt. Ltd. in respect of the land presently taken over, unless it is established that the acquisition exceeded the extent of 64.4075 hectares.”
“W.P.(C) No.12573 of 2025… it shall be open to them to claim enhanced compensation in accordance with the criteria prescribed under the LARR Act, 2013. W.P.(C). No.14540/2025 filed by M/s. Padhoor Plantations Pvt. Ltd. will also stand disposed of in tune with the directions in W.P.(C) No.12573 of 2025.” It concluded that “this writ petition also stands disposed of” in W.P.(C) No.14068 of 2025.
Advocates Representing the Parties
For the Petitioners: Sri. K. Babu Thomas, Smt. Drisya Dileep, Smt. Marykutty Babu
For the Respondents: Sri. K.Gopalakrishna Kurup, Advocate General; Sri. S. Kannan, Senior Government Pleader; Government Pleaders Sri. M.S. Imthiyaz Ahammed, Sri. M.A. Fayaz, Sri. B. Ashok Shenoy, Sri. P.S. Gireesh, Sri. Arjun R. Naik, Sri. Sunil K.P., Sri. Umasanker U.U., Kum. Meharban, Sri. Muhammed Bani M.; Sri. C.E. Unnikrishnan, Special Government Pleader to Advocate General; Sri. M.H. Hanil Kumar, Special Government Pleader (Revenue)
Case Title: M/s. Elstone Tea Estates Ltd. & M/s. Padhoor Plantations Pvt. Ltd. v. State of Kerala & Others
Neutral Citation: 2025: KER:85395
Case Number: W.A. No.229 of 2025, W.P.(C) Nos.12573, 14540 & 14608 of 2025
Bench: Justice A. Muhamed Mustaque and Justice Harisankar V. Menon
