Right of State Authority to Acquire Land

Procedure 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.

Question
why, 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 49
Appellant challenged acquisition proceedings
as null & void
As land acquired wasnot meant for public
purpose
Ct- 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 1976

Electricity 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 award

Apportionment of the award

Finality of the award

First Schedule of LAA 1960

Market Value

No definition in LAA

Therefore, must rely on the meaning as

interpreted by courts

Market Value

Hoe 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.

Betterment

Severance damage

Injurious affection

Disturbance claims

Incidental expenses

Accommodation works