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The Ambivalent Mind In Compulsory Acquisition: Amending A Section 8 Declaration?

by
Clarence Edwin: LLB (Hons) (Lond), CLP; Advocate & Solicitor, High Court Malaya.
Malaysia

Introduction

With the accelerated development Malaysia has seen over the past few years, land has
become an expensive and scarce commodity. The scarcity of land in key locations eyed for
development has led the Government to turn to the only solution which presents itself -
compulsory acquisition.

A man's right to own property is one of the fundamental rights protected by the Federal
Constitution. However, as in any society, this right must be subservient to public interest and
hence art 13(1) of the Federal Constitution was drafted by its promulgators to provide for
compulsory acquisition of propertyin accordance with the law. Article 13(2) of the Federal
Constitution further provides that no law shall permit the compulsory acquisition of property
without making provisions for adequate compensation to be paid to the dispossessed owner.

In Malaysia, the Land Acquisition Act 1960 was passed to regulate compulsory acquisition of
land. It is clear from the import of art 13(1) of the Federal Constitution that compulsory
acquisition can only be done in accordance with the law and therefore one would expect the
highest degree of compliance with the provisions of the Act by the acquiring authority lest the
acquisition be ultra vires the Land Acquisition Act 1960 and a contravention of art 13 of the
Federal Constitution.

The degree of compliance that is expected of an acquiring authority was recently questioned
in the case of Keck Seng (Malaysia) Bhd. v. Pentadbir Tanah, Johor Bahru [1996] 3 CLJ 573.
In this case, the Commissioner of Land and Mines, Johor published a declaration in the
Gazette (the first notification) under s. 8 of the Land Acquisition Act 1960 announcing that all
the scheduled land referred to therein were needed for "Kawasan Perindustrian Tanjung
Langsat".

The plaintiff was the registered proprietor of Lot 487 comprising an area of 1,220 acres. A
schedule of lands affected by the acquisition was included in the declaration in accordance
with s. 8(2) of the Land Acquisition Act 1960. This schedule, which was Form C of the second
schedule to the Land Acquisition Act 1960, stated that the approximate area to be acquired
from Lot 487 was 1,037 acres 3 roods and 5 poles.

Approximately thirteen months later the Commissioner published a notification (the second
notification) in the Gazette announcing that the approximate area to be acquired from Lot 487,
as appearing in the schedule published earlier, should read as 830 acres 0 rood and 32 poles.
Some five and a half months later, the Commissioner published yet another notification (the
third notification) stating that the second notification was thereby cancelled and that the
approximate area to be acquired from Lot 487 as stated in the schedule to the first notification
still stands. The Commissioner thereafter proceeded to assess the compensation payable for
Lot 487 and took the date for assessment to be the date of the first notification.
The plaintiff filed an originating summons in the High Court seeking a declaration that the
Commissioner had no power to revive the first notification and consequently the appropriate
date to be taken into account when assessing the compensation payable should be the date
of the third notification. The learned judge dismissed the application and ruled that the
appropriate date for assessing the compensation was at the date of the first notification.

Amendment Of A Declaration

There is no provision in the Land Acquisition Act 1960 that expressly confers on an acquiring
authority the power to amend a s. 8 declaration. The Act, in my view, has been designed to
exclude a power to amend a declaration. Section 4(1) of the Land Acquisition Act 1960 states
that the State Authority may publish in the Gazette a notification in Form A when it is satisfied
that any land in the State is likely to be needed for the purposes specified in s. 3 of the Act.
The State Authority has twelve months after the publication of this preliminary notice to publish
a declaration under s. 8. Under s. 7, the Collector has to prepare and submit to the State
Authority a plan of the whole area of such lands identifying the particular lands or parts thereof
which is necessary to acquire and a list of such lands in Form C.

When the State Authority decides that any of the lands referred to in s. 7 needs to be acquired,
a declaration in Form D will be published in the Gazette.1 A copy of the list of lands in Form
C (prepared earlier under s. 7), amended, if necessary, in accordance with the decision of the
State Authority, is to be included as a schedule to the declaration.2

It is clear from reading ss. 4, 7 and 8 of the Act together that once a declaration is published,
no amendments may be made to the schedule to the declaration. The Act expects the authority
to carefully consider what lands or portions thereof are required for the purposes of s. 3 and
gives a period of twelve months to the authority to reflect, consider and arrive at a decision.
Any amendments to the approximate area to be acquired must be decided before the s. 8
declaration is published. A declaration under s. 8, in my view, must be final. This must be so
because a registered proprietor needs to know what portion of his land is being acquired in
order to allow him to deal, if he so wishes, with the portion not acquired.

Any amendment reducing the area to be acquired once a declaration is published is prejudicial
to the land owner and this is evident from the requirements imposed by s. 35 of the Land
Acquisition Act 1960. This section provides that the State Authority is at liberty to withdraw
from the acquisition of any land of which possession has not been taken. However, s. 35(2)
requires the Collector to compensate the owner for any damage sustained by reason or in
consequence of the acquisition proceedings.

Therefore the State Authority can effect a reduction in the approximate area to be acquired
appearing in a s. 8 declaration published in the Gazette by making a withdrawal under s. 35
and not by publishing another Gazette Notification amending the declaration. To permit the
State Authority to reduce the approximate area to be acquired by merely publishing an
amendment in the Gazette would tantamount to allowing it to withdraw from the acquisition of
that reduced area without having to pay compensation under s. 35. The degree of compliance
expected of an administrative authority exercising a statutory power is evident from the
judgment of the Federal Court delivered byAbdoolcader J (as he then was) in the case of Pow
Hing & Anor. v Registrar of Titles, Malacca [1981] 1 MLJ 1553 .
...the message this decision delivers enjoin every official concerned with or involved in
exercising powers and duties under the Code and related legislation to regard this judgment
as a regrettably necessary but solemn caveat, giving warning, loud and clear, against any
wanton disregard and sloppy application of express statutory provisions in the exercise of their
functions, and one to be understood, marked and digested as such. We would add that they
must strive to be au fait with the law they have to administer ...

It is apparent in the present case under consideration that the State Authority has shown
'wanton disregard' for express statutory provisions by publishing an amendment in the Gazette
in place of the legally required withdrawal.

Could it be argued then that s. 35 of the Land Acquisition Act 1960 does not apply in this case
because the power to amend a s. 8 declaration is implicit in the Act? Maxwell on The
Interpretation of Statutes (12th Edn) at p. 258 states:

Where a statute confers a power, and particularly one which may be used to deprive the
subject of proprietary rights, the courts will confine those exercising the power to the strict
letter of the statute.

The Land Acquisition Act 1960 deprives the citizen of his proprietary rights it is expropriatory
in nature. As such, one must be slow to imply powers into the Act. Implying powers which may,
according to some, improve the efficacy of the Act must give way to the subject's rights
especially when such powers may be open to abuse. If the State Authority has an implied
power to amend a s. 8 declaration , what would stop the State Authority from increasing the
area to be acquired by amending the declaration and having the compensation assessed as
at the date of the original declaration? In Keck Seng (Malaysia) Bhd. the Commissioner
reduced the area to be acquired by some two hundred acres and did not pay damages under
s. 35 for withdrawal from the acquisition. If this amendment is valid at law, then by the same
token the area to be acquired may be increased by an amendment and market value
determined at the date of the first notification. This would clearly be contrary to art 13(2) of the
Federal Constitution as adequate compensation would not be given to the owner.

Adequate compensation can only be given when the value of the land is assessed as at the
date when the increased area of land was acquired. Whether the land had appreciated in
value from the date of the publication of the declaration to the date of any amendment is
irrelevant. The fact of the matter is that the land owner has a right in law to have the market
value of his land assessed at the date of the purported amendment. In any event,land is a
commodity, which in law, is always deemed to have a special value4 and this was given judicial
notice by the Federal Court in Tan Sri Khoo Teck Puat & Anor. v Plenitude Holdings [1995] 1
CLJ 15. Therefore the possibility of the land having increased in value is not a remote
possibility but a probability.

A Fresh Declaration

If the State Authority has no power to amend a s. 8 declaration, then what can the second and
third notification in Keck Seng's case be regarded as? It would be all too easy to say that the
amendments were ultra vires and therefore void, as this would serve the purposes of the State
Authority in this case since their intention when publishing the third notification was to acquire
the acreage specified in the first notification which was not tainted with any illegality. However,
to adopt such a view would clearly be inequitable in law as the second notification represented
to the owner and led him to believe that he was entitled to dispose some two hundred acres
of land, which the State Authority 'withdrew' from the acquisition proceedings, at prevailing
market value. This raises an estoppel against the proposition that the first notification is valid
and the second and third void. If the second and third notifications are ultra vires the Act, then
the whole acquisition proceedings in this case must be regarded as void and a fresh
declaration must be published. It would be unthinkable to severe the illegal acts or disregard
them and give effect to the first notification.

If the whole proceedings are not deemed a nullity, then the true character of the second and
third notification must be uncovered. In order to discover the true character of the second and
third notifications, one must consider its substance and not its form. The second notification
serves to reduce the approximate area to be acquired. As stated earlier, this amounts to a
withdrawal. What remained at that point in time is a S 8 declaration to acquire some 830 acres
from Lot 487 instead of the earlier 1037 acres. It is vital to note that the original declaration
had ceased to exist when the second notification was published. The third notification
'cancelled' the second notification and stated that the area to be acquired from Lot 487 was
that originally stated in the first notification. The third notification must therefore in substance
be a fresh declaration since it has 'cancelled' the only declaration which was subsisting at the
date of its publication.

In relation to whether the State Authority has the power to acquire a greater portion of a piece
of land without a fresh declaration,Om Prakash Aggarawala in his book Compulsory
Acquisition of Land in India and Pakistan (3rd Edn) had this to say:

Acquisition by the Collector of the whole land of a claimant in face of a declaration for a partial
acquisition thereof without publication of a fresh declaration is illegal and ultra vires. The
Collector cannot acquire or give possession of land beyond the boundaries given in the
declaration. If he does so he commits an act of trespass ...

This view is supported by the decision in Bhagwan Das Nagindas v. Special Land Acquisition
Officer.5 In this case, the Collector issued a notification that a part only of a certain land was
to be acquired under the Land Acquisition Act. The owners expressed a desire that the whole
land should be acquired and not a part. The Collector agreed to acquire the whole land, but
did not consider it necessary for the Government to declare its intention for acquiring the whole.
The owners claimed that the whole proceedings were ultra vires as there was no notification
to acquire the whole land. Heaton Jdelivering the judgment of the court stated:

I think the proceedings are invalid and briefly for this reason. The Government have no right
whatever and no power against the wishes of the owner to take this land except as provided
by the Land Acquisition Act. Here they have taken the claimants' land without the declaration
required. That seems to me to be fundamentally and absolutely wrong. An argument was
advanced as to whether ...the notification of the whole might be dispensed with although the
whole was to be acquired, provided that there had been a declaration regarding the part. My
opinion is that ... in a case of this kind acquisition or rather the taking up of land without a
declaration relating to the land taken is absolutely illegal. I feel no doubt, therefore, that the
acquisition was contrary to law and the whole of the proceedings ... are bad and must be set
aside.

In light of this decision, the State Authority must have published a fresh declaration in order to
acquire 1037 acres from Lot 487. The third gazette notification must, therefore, be viewed, de
bene esse, as a s. 8 declaration albeit not in the form of one.
This is exemplified in the decision of the Privy Council in Ma Sin & Ors. v. Collector of Rangoon
ILR 7 Rang. 227 = AIR 1929 PC 126. In this case, the Government published a declaration
that the appellants' land was required for a public purpose. That declaration included besides
the land which they desired to take from the appellants, certain land belonging to other people.
The Government changed their mind about acquiring the land of the other people and
consequently published another declaration specifying the same land belonging to them, but
at the same time, announcing that the former declaration was cancelled.

The appellate court, after mentioning the two notifications, then stated:

Though the word 'cancelled' was used to mean that the first notification was either superseded
or modified, the first notification practically remained good so far as these two plots of Maung
Ba Kyaw and Ma Sin are concerned. So in our opinion the market value at the date of the
publication of the first notification should be the market value to be considered.

On further appeal to the Privy Council, Viscount Dunedin, after producing the above passage,
went on to criticise the erroneous reasoning adopted by the appellate court by stating:

Their Lordships are unable to take that view, because it is absolutely in the teeth of cl. 1, sub-
s. 1, of s. 23, LandAcquisition Act 1894, which says that in determining the amount of
compensation to be awarded, the court shall take into consideration 'the market value of the
land at the date of the publication of the declaration relating thereto under s. 6.' Now, it is
perfectly certain that the only notification which gave right to take this land was the second
notification, and therefore that date must be the date taken. That really vitiates the judgment
of the appellate court. It is apparent from the figures that all this land was galloping upwards
in value, and in particular, that sales were proved, after the date of the first notification, but
before the date of the second, which showed a highly increased value, and that it was in
considering those sales, as well as the former sales, that the learned judge of first instance
came to the result that he did. Their Lordships are therefore clearly of the opinion that the
judgment of the appellate court cannot stand ..." (emphasis added)

In Ma Sin, the acquiring authority was withdrawing from the acquisition of certain lands but
continued with the acquisition of the two plots mentioned in the dictum above. There was no
change with regards the two plots, yet the view taken by the Privy Council was that the proper
date to assess the value of the land was at the date of the second notification.

In Keck Seng's case, there was a change in acreage by the second notification and a
cancellation of that notification by a third. Clearly applying the Privy Council's decision, the
notification which 'gave right to take' approximately 1037 acres of Lot 487 was the third
notification since the second had made a withdrawal of 200 acres of that Lot. It would therefore
be 'absolutely in the teeth' of s. 1(1)(b) of the First Schedule to the Land Acquisition Act 1960
to value Lot 487 at the date of the first notification.

Retrospective Effect

Before considering further the implications of the acts done by the Commissioner in Keck
Seng's case, it is crucial to the following discussion to reproduce the third notification verbatim.

No. 1167.

PEMBETULAN-PEMBETULAN
Pemberitahuan Bil. 221 yang disiarkan dalam Warta Kerajaan Negeri Johor bertarikh 17hb
Februari 1994 adalah dibatalkan manakala pengambilan balik tanah seluas 1,037 ekar 3 rod
05 pol yang terkandung dalam LOT.487 Geran 15748 yang terletak di Mukim Plentong,
Daerah Johor Bahru sebagaimana Pemberitahuan Bil. 12 yang disiarkan dalam Warta
Kerajaan Negeri Johor bertarikh 7hb Januari 1993 adalahtidak terjejas. (emphasis added)

Istilah Undang-Undang compiled by Dewan Bahasa dan Pustaka (revised edition) 1986
defines 'tanpa menjejas' as 'without prejudice'. Therefore the third notification published in the
Gazette was intended to revive the first notification which had ceased to exist upon the
publication of the second.

What could be the reason for adding these two words in the third notification? In cases such
as these acta exteriora indicant interiora secreta. The State Authority by incorporating these
two words is attempting to give retrospective effect to the third notification. The position in law
with respect to retrospective legislation is clear. A classical exposition of the rule regarding
retrospectivity is contained in the following passage from the judgment ofRS Wright Jin Re
Athlumney [1898] 2 QB 551:6

Perhaps no rule of construction is more firmly established than this that a retrospective
operation is not to be given to a statute so as to impair an existing right or obligation, otherwise
than as regards matter of procedure, unless that effect cannot be avoided without doing
violence to the language of the enactment. If the enactment is expressed in language which
is fairly capable of either interpretation, it ought to be construed as prospective only.

There is no provision in the Land Acquisition Act 1960 which permits the State Authority to
publish in the Gazette a notification with retrospective effect. If courts have adopted the
position that retrospective legislation must be clearly worded to be enforced as such, it must
be the position in law that in the absence of express statutory provision, a subordinate
authority cannot exercise powers conferred by an Act of Parliament with the intention that it
should operate retrospectively.

This rule should apply with greater rigour in cases such as Keck Seng's since at the date of
the second notification, the land owner had avested right to dispose an extra 200 acres of land
at the market value prevailing at that date.

Conclusion

If the legislature has provided for an exception to basic and fundamental rights protected by
the Constitution and has conferred powers on a subordinate authority to overrule those rights
in the appropriate case, those powers must be exercised in accordance with the express
provisions of the enabling Act. An admistrative authority has no excuse for failing to adhere to
express statutory provisions and the common law. If they are in doubt as to the extent of their
powers under a particular legislation, they should take appropriate measures to obtain legal
advice. This will diminish the possibility of challenges to the legality of their actions and steer
clear of unnecessary litigation. The acts done in Keck Seng's case may be viewed as contrary
to basic and fundamental principles of law. Such acts will inevitably be questioned and
challenged toties quoties as it was in Keck Seng's case.
Endnotes

1. Section 8(1) of the Land Acquisition Act 1960.

2. Section 8(2) of the Land Acquisition Act 1960.

3. Cited with approval by the Federal Court in S. Kulasingam & Anor. v. Commissioner of
Lands, Federal Territory & Ors [1982] CLJ 153 (Rep).

4. See the judgment of Edgar Joseph Jr FCJ at p. 26f.

5. 17 Bom LR 192.

6. At p. 551 & 552.