Justice N. Nagaresh, Kerala High Court
Can’t Deny Rent Citing Unauthorised Construction: Kerala High Court Sets Aside Collector’s Refusal To Compensate COVID-Era Use Of Private Hospital
|The Court said the State cannot deny compensation after taking over private property for COVID treatment, holding that such refusal on the ground of unauthorised construction would offend the constitutional right of the petitioner under Article 300A.
The Kerala High Court has set aside the District Collector’s order denying rent and compensation to a charitable trust whose hospital and medical infrastructure were taken over by the government during the COVID-19 pandemic. The Court held that the refusal to pay compensation on the ground that the building lacked statutory clearances was arbitrary and violated the petitioner’s constitutional right under Article 300A.
A Single Bench of Justice N. Nagaresh observed, “Assuming that the building requires certain statutory clearances, even then the respondents who have taken over the building and used the same invoking the provisions of the Disaster Management Act, 2005 cannot decline rent/compensation holding that the building construction was unauthorised.”
The Court added, “…respondents are legally bound to pay rent/compensation to the petitioner if the building is used by them, failure of which would offend the constitutional right of the petitioner under Article 300A of the Constitution of India.”
Advocate P.M. Saneer appeared for the Petitioner, while Government Pleader Rajeev Jyothish George represented the Respondents.
Brief Facts
The Petitioner, a charitable trust managing a medical and dental college in Varkala, challenged the refusal by the District Collector to compensate it for the takeover of its property during the COVID-19 emergency. In March 2020, at the onset of the pandemic, the government authorities requisitioned the college’s hospital building, classrooms, hostels, staff quarters, and medical infrastructure for conversion into a COVID First Line Treatment Centre and later, a COVID hospital.
The Petitioner complied with all directions from the District Medical Officer, including deploying human resources, making the lift operational, ensuring water and sanitation, and maintaining readiness of hospital infrastructure and equipment. The occupation lasted for nearly 20 months, after which the premises were returned to the petitioner in November 2021.
The trust later submitted a compensation claim amounting to approximately 46 crores for building usage, equipment rent, and infrastructural services. However, the District Collector rejected the claim on the ground that the building lacked recognition from the Kerala University of Health Sciences and had been constructed without valid permits. The Collector also stated that there was no policy permitting rent payment for medical equipment.
Reasoning of the Court
The Court noted that the government had utilised the petitioner’s property for a public purpose under statutory authority, and that deprivation of property without compensation was constitutionally impermissible. It observed, “If the petitioner’s building and facilities are taken over and utilised by the Government authorities for more than 1½ years, the petitioner is entitled to receive compensation for such taking over and user.”
Rejecting the justification that statutory violations invalidated the claim, the Court held, “If there is any statutory violations in the construction of the building, the authorities will be free to take such action as is permissible. But, the respondents are legally bound to pay rent/compensation to the petitioner if the building is used by them, failure of which would offend the constitutional right of the petitioner under Article 300A of the Constitution of India.”
As to the medical equipment used during the takeover, the Court found the refusal to compensate unjustified, and observed, “The finding of the District Collector that there is no provision now to pay rent for medical equipments is highly arbitrary and unacceptable. If the respondents have taken over the medical equipments, then the respondents are bound to pay rent/compensation for medical equipments. Similarly, if any of the equipments are missing or damaged, the petitioner is entitled to due compensation for the loss sustained by him.”
The Court held the District Collector’s action to be “highly arbitrary and unsustainable,”, and quashed the impugned order, directing the District Collector and District Medical Officer to reconsider the Petitioner’s claim and issue a reasoned decision within three months.
Cause Title: SR Educational & Charitable Trust v. State of Kerala & Ors. (Neutral Citation: 2025:KER:57041)
Appearance
Petitioner: Advocates P.M. Saneer, Tony George Kannanthanam, Nithya R.
Respondents: Government Pleader Rajeev Jyothish George