Licence Holder On Government Land Cannot Be Treated As Encroacher: Kerala High Court Directs Grant Of Rehabilitation Compensation Upon Displacement

The Court was hearing a writ petition challenging the rejection of the petitioner’s claim for rehabilitation compensation in connection with displacement caused by the Kochi Metro Rail Project.

A Bench of Justice Viju Abraham observed: “Taking into consideration the fact that the petitioner was running the business in the puramboke land owned by the Corporation, under their permission and on the strength of a licence issued by them, the petitioner cannot be construed to be an ‘encroacher’. Admittedly, there are documents to show that the petitioner and his predecessor were in possession and enjoyment of the land on the basis of a valid permission granted by the authorities, and on payment of licence fee and ground rent as discernible from Exts.P1 to P3.

Therefore, when this Court as per Ext.P17 has been found that the petitioner is not an encroacher, the denial of the claim of the petitioner as per Ext.P18, holding that the petitioner being an encroacher of the puramboke land is only entitled for Rs.30,000/-, is absolutely without any basis and in fact in violation of the direction issued by this Court as per Ext.P17, which has become final”, the Bench added.

S. Sanal Kumar, Senior Advocate, appeared for the petitioner; Riyal Devassy, Government Pleader, appeared for the respondents.

Background

The petitioner was running a bunk shop at Champakkara junction, which had originally been established by his father in 1970. The business was conducted under a licence issued by the Cochin Corporation, with regular payment of ground rent and renewal of the licence from time to time.

Following the implementation of the Kochi Metro Rail Project and road widening between Vyttila and Petta, the petitioner agreed to vacate the premises on the understanding that he would be entitled to compensation and rehabilitation benefits.

While similarly placed persons were granted substantial compensation, the petitioner was awarded only ₹30,000 on the premise that he was an encroacher occupying puramboke land.

The petitioner challenged this classification, contending that his occupation was lawful, being based on a licence and payment of rent, and that denial of compensation violated both the rehabilitation scheme and earlier directions of the Court.

Court’s Observation

At the outset, the Court examined whether the petitioner could be treated as an encroacher. Referring to earlier proceedings, it noted that the petitioner was in possession of the land under a valid permission granted by the Corporation, supported by documentary evidence, including licence and rent receipts.

The Court held that occupation under licence cannot be equated with unauthorised encroachment, observing that such classification had already been rejected in earlier proceedings and could not be reintroduced to deny compensation.

The Court then addressed the contention of the State that since the land belonged to the Government, there was no requirement of acquisition and hence no obligation to pay compensation.

While accepting the general principle that Government land need not be acquired, the Court made a clear distinction in cases where such land is occupied under licence. It held that displacement of such lawful occupants, especially where livelihood is affected, attracts entitlement to rehabilitation benefits.

“It is true that the Government land need not be subjected to acquisition proceedings and there is no occasion for payment of any compensation, … But the position is totally different when Government land is in possession of a person based on a licence/permission, as in the case of the petitioner. In the case in hand, the petitioner has been permitted to occupy the Government land based on a licence/permission, including payment of ground rent and has been in occupation from 1970 onwards”, the Court remarked.

The Court noted that the petitioner had been conducting business for more than five decades and that the bunk shop constituted the sole source of livelihood for his family. In such circumstances, denial of compensation on a technical ground would defeat the purpose of the rehabilitation framework.

The Court further examined the rehabilitation package under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, as well as the Government Order dated 29.12.2017.

It observed that the Government Order intended to provide a more beneficial compensation package than that envisaged under the statutory framework, and that its application could not be used to reduce compensation by misclassifying the petitioner as an encroacher.

The Court also took note of instances where similarly placed persons had been granted substantially higher compensation, and held that the petitioner’s claim must be considered on parity, without arbitrary classification.

In this context, the Court observed that the attempt to treat the petitioner as an encroacher was “only to deny the compensation legally due,” and could not be sustained.

Conclusion

The Court held that the petitioner was entitled to rehabilitation compensation and could not be treated as an encroacher.

Accordingly, the writ petition was allowed, and the impugned order rejecting the petitioner’s claim was set aside.

The Court directed the District Collector to determine and grant compensation in accordance with the applicable rehabilitation package, without treating the petitioner as an encroacher, within a stipulated time frame.

Cause Title: Laiju M.S. v. The District Collector & Ors. (Neutral Citation: 2026:KER:29986)

Appearances

Petitioner: S. Sanal Kumar, Senior Advocate; Advocates Bhavana Velayudhan & T.J. Seema

Respondents: Riyal Devassy, Government Pleader; Advocates Joby Cyriac; V.P. Rejitha (Puzhakkalidom), Kurian K Jose, Devika T.R.

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