LAND OWNERS SHOULD TAKE NOTE THAT ASSESSORS NO LONGER HAVE THE POWER TO DETERMINE THE COMPENSATION SUM
A landmark ruling by the Federal Court has now made it clear that only constitutionally appointed judges can decide on compensation for land acquisitions.
The Federal Court ruled last Friday that a provision that gives assessors the right to decide on compensation, in Section 40(A) of the Land Acquisition Act 1960, is in fact unconstitutional.
The SunDaily reported that Federal Court judge Tan Sri Zainun Ali ruled that Section 40(A) of the Act is ultra vires to Article 121 of the Federal Constitution on judicial powers and therefore “must be struck down”.
She added that the provision “ignores the role of judges” and that matters of compensation “should be decided by a judge and no other.
The judgement, which will have a marked impact on how future land acquisitions are conducted, was made by a five-man bench led by Court of Appeal president Tan Sri Zulkelfi Ahmad Makinudin following unanimous decision for two cases.
Other judges on the bench were Tan Sri Hasan Lah, Tan Sri Abu Samah Nordin, Tan Sri Zaharah Ibrahim and Zainun.
However, it has since been clarified that the ruling only applies to pending and future cases.
The issue was brought to light in a suit by Semenyih Jaya Sdn Bhd against the Hulu Langat District Land Administrator over compensation after its land was acquired for the construction of a highway in the Kajang in 1998.
The land was initially earmarked for the development of 57 factory lots, but acquired by the district authority for a sum of RM20.8 million.
Semenyih Jaya argued that RM45 million would be a fairer sum for the land and loss of income as a result of the acquisition. The matter was then referred to the High Court where two assessors sat with the judge. The outcome was Semenyih Jaya only received an additional RM160,000 for “injurious affection”.
In 2013, the Court of Appeal upheld the High Court’s decision.
In a separate case, landowners Amitabha Guha and Parul Rani Paul filed a similar suit against the same land administrator.
However, the Federal Court’s judgement yesterday stated that the sanctity of judicial power is preserved when the “single judge who sat with the assessors is not bound by their opinion in arriving at a decision”.
“Appropriate compensation by the judge acts also as a safeguard entrenched in the constitution, and must be based on market value at that time,” the five-man bench said in a joint statement.
The bench had then ordered compensation in both cases to be forwarded before a High Court judge, who could chose to consider the opinion of the assessors, but ultimately make a ruling that was independent of it.