LAND ACQUISITION

CONCEPT

Compulsory acquisition of land is the process by which the

government acquires from private landowners their land which
is needed for any public purpose or for a purpose beneficial to
the economic development of the country. Compulsory
acquisition of land affects the constitutional rights of
landowners. It is thus important for landowners to understand
their rights, so their land rights are protected and adequately
compensated. Section 40(a) of the NLC 1965 stated that State
Authority shall have power over all State land within the
territories of the State.
 CONCEPT

 Land acquisition is considered as an interference with an

individual`s right to property. However, the right of property
is not absolute right since it is subject to many other
provisions. For instance, the State Authority has the right to
take over land. In the case of land acquisition, the property is
acquired by the State against the will of the proprietor or
occupier or owner of the land. This is a serious encroachment
on the right of property. However, the acquisition of land is
subjected to two essential conditions namely, private property
is to be taken for public use and just compensation must be
given to the landowner for the property taken.
 CONCEPT

 ARTICLE 13 OF FC : 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. Article 13(2) of the Federal
Constitution stated that no law shall provide the compulsory
acquisition or use of property without adequate
compensation. This is one of the conditions for State
Authority to acquire land where compensation must be given
to the landowner. If it fails to do so, no acquisition is allowed.
However, another condition in relation to the acquisition of
private property can only be acquired if it is for public
purpose was not mentioned under this provision.
 CONCEPT

 However, it can possibly be argued that Article 13(2) of the

Federal Constitution incorporates the doctrine of land
acquisition and hence the concept of public purpose can be
implied therein. ARTICLE 76(4) OF FC: Parliament may
for the purpose only of ensuring uniformity of law and
policy make laws with respect to…’compulsory acquisition
of land.’ LAA 1960 is a consolidation of previous state
enactments on land acquisition and is based on the Indian
Land Acquisition Act 1894.
 CONCEPT

 RATIONALE FOR LAND ACQUISITION - Doctrine of

‘salus populi suprema lex’ – the interests of the public are
paramount. - Principle of ‘eminent domain’ – inherent right
of the state.
 LAND ACQUISITION ACT 1960

 LAA has substantive & procedural provisions 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.”
 LAND ACQUISITION ACT 1960

SCOPE OF ACQUIRING POWERS/ POWER TO ACQUIRE LAND

In order to acquire a land, the State Authority must look upon the purpose of
the acquisition. The purpose of the land acquisition must be within the
situation stated under section 3 of Land Acquisition Act 1960 states that the
State Authority may acquire land for:
A) public purpose ; or
B) acquire land needed by any person or corporation for works which in the
opinion of the State Authority is beneficial to the economic development of
Malaysia or to the public generally or any class of the public; or
C) for the purpose of mining or for residential, agricultural, commercial,
industrial or recreational purposes or combination of such purposes. The
purpose of this acquisition is to give benefit towards the society for the better
development in social and economic also for the protection of natural
environment.
 LAND ACQUISITION ACT 1960

RIGHT OF STATE AUTHORITY TO ACQUIRE PRIVATE LAND

However, the right towards acquisition of property is not absolute as it is an
essential incident of state sovereignty. As stated in the case of Weng Lee
Granite Quarry Sdn Bhd v Majlis Perbandaran Seberang Perai, the power
of the state authority in granting the approval is not absolute or arbitrary as
it need to be confined with some agreed standards. The respondent in this
case must use the powers judiciously and within the limits of the powers
prescribed by the law. The power of state as an important domain to acquire
the land is subject to two essential circumstances which are the private
property is to be taken only for public use. Besides, the benefit must be just
and an adequate compensation must be paid for the acquired property.
 LAND ACQUISITION ACT 1960

A private property can be acquired by the State authorities against the will or consent
of private landowners. However, there will be a serious encroachment of property
rights as the concept of land acquisition is to be carried out in accordance with the
established legal principles. As such, there will be an involvement of the violation of
private property rights that are guaranteed by law.
The question to determine whether the special circumstances exist can be raised in
Damai Motor Kredit Sdn Bhd & Anor v. Kementerian Kerja Raya Malaysia,
where it was stated that the court must be guided with the facts of case and weigh the
interest of a landowner which had been affected. In section 38 (4) of Land
Acquisition Act, the burden of proof is on part of the respondent to show the special
circumstances arises in order to convince the court to exercise its discretion. As in
this case it was important to enlarge the time for filing of objection on the land
acquisition.
 LAND ACQUISITION ACT 1960

 Public Purpose under section 3(1)(a) The term ‘public purpose’ is

broad and is not defined by any provisions under LAA 1960.
 In the case of Bajirao T Kote v State of Maharashtra, the court held
that public purpose is not capable of precise definition. It is based on the
situation of each case. Public purpose is served for the general interest of
the community as opposed to the particular interest of an individual.
 In the case of S.Kulasingam & Anor v Commissioners of Lands,
Federal Territory & Ors, the court held that even if the public sporting
events had been held on the land this did not constitute user for a public
purpose as the use was at the discretion of the association and subject to
the payment of fees. It was also stated that the expression of ‘public
purpose’ was incapable of precise definition but it was still best to
employ a simple common-sense test which is by looking at whether the
purpose serves the general interest of the public.
 LAND ACQUISITION ACT 1960

 In this case, the court held that the expression pubic purpose
is incapable of a precise definition. The court in deciding
believed that the simple test to be applied should be whether
the purpose serves the general interest of the community.
The test was then affirmed in Ahmad Bin Saman V
Kerajaan Negeri Kedah.
 LAND ACQUISITION ACT 1960

Beneficial to the economic development under section 3(1)(b)

The amendment of the LAA 1960 in 1991 in relation to section 3(b) was said
to have broader the purposes of acquisition and further extended the power of
acquisition of State Authority. The terms added were not clearly defined in
any provisions in LAA 1969 and the matter is subjected merely to the view of
State Authority. Such discretion may lead to the existence of threat of fraud
and abuse of power as it will erode the positive meaning of public and national
economic development.
In the case of Honan Plantations Sdn Bhd v Kerajaan Negeri Johor &
Ors, the plaintiffs owned a land until it was acquired. The plaintiff alleged that
the acquisition was invalid and was done in bad faith. The court held that the
State Authority may acquire any land which is needed by any corporation or
person for the purpose which is beneficial to the economic development of
Malaysia.
 LAND ACQUISITION ACT 1960

Purpose of mining residential, agricultural, commercial, industrial,

recreational or any combination of such purposes under section 3(1) (c)

In the case of Syed Omar Alsagoff v Government of Johore, some parts
of the land acquired were marked for “special purposes”. Acquisition was
challenged on the basis that the acquisition was in fact acquired for purposes
other than that permitted under LAA 1960. The court held that in the absence
of bad faith, it is not possible to challenge that a portion of the land to which
the declaration in the Gazette relates is in fact wanted for a purpose other
than those specified. Once the declaration in Form D is published in the
Gazette under S. 8(1) LAA 1960, this is conclusive evidence that the land is
needed for such purposes in the declaration. Thus, cannot be challenged.
 LAND ACQUISITION ACT 1960

AWARD OF COMPENSATION
Section 14(2): Every award prepared...shall be final and conclusive
evidence of: the area of any scheduled land, its value in the opinion of the
LA, and of the apportionment of the compensation awarded.
However, section 37 gives a right to persons interested to apply to court to
object against the amount of compensation.
In the case of Tan Yen Foon v Pentadbir Tanah Wilayah Persekutuan
Kuala Lumpur, the issue arose as to whether the plaintiff can make an
objection to the court against the amount of compensation? The court held
that under section 37(2) of the LAA 1960, the compensation which was
below RM 300 was said to be final and no objection can be raised against it.
In PHT Daerah Barat Daya Pulau Pinang v Kam Gin Paik [1983] (FC),
LA need not give reasons for his award, so long as there is an award made in
Form G - section 14(2) – finality and conclusiveness of award.
 LAND ACQUISITION ACT 1960

ASSESSMENT OF COMPENSATION
The assessment of compensation to be awarded is done by referring to
“Principles Relating to the Determination of Compensation” in the First
Schedule. Article 13(2) of the Federal Constitution stated that no law shall
provide for compulsory acquisition or use of property without adequate
compensation.
Following are some criteria to be determined when it comes to the amount
of compensation that need to be awarded namely:
- the market value of the land,
- list of matters to be taken into consideration e.g., forced change of
residence or place of business.
- list of matters which have to be neglected e.g., damage sustained that will
not be a good cause of action.
LAND ACQUISITION – CAP. 41
 CONTENTS:-

PART I – PRELIMINARY
PART II – ACQUISITION
PART III – REFERENCE TO COURTS
AND PROCEDURES THEREON
PART IV – PAYMENT
PART V – TEMPORARY OCCUPATION OF
LAND
PART VI - MISCELLANEOUS
PART I - PRELIMINARY
S.1 – S.2
Basically lays out amongst other things:-
Citation of the Act
The terminologies used
PART II - ACQUISITION
S.3 – S.12
 Lays out the purposes for which land may be acquired
 Power to enter and survey
 Declaration that land is acquired for public purposes
 Plan to be made and notices given
 Power to require statements as to names and interests
 Inquiry and award by Land Officer
 When award of Land Officer to be final
 Power to take possession
 Entries in the Register
 Adjustment of compensation
PART III – REFERENCE TO COURT
AND PROCEDURE THEREON
S.13 – S.27
 When award is not accepted, matter can be referred to the
Court
 Statement in writing from the Land Officer required
 Court will serve notice to the applicant & interested parties; if
objection on compensation, to the Land Officer
 Power to appoint assessors
 Matters to be taken into account when assessing compensation
 Matters to be disregarded when assessing compensation
 Assessor’s opinion to be recorded
 Opinion of Court prevails in the case there is difference of
opinion
 PART IV - PAYMENT
S.28 – S.29
 Offer of compensation to be made in writing.
 If compensation not paid or deposited before or on taking
possession, the amount awarded will be paid with 4% per
annum.
PART V – TEMPORARY
OCCUPATION OF LAND
S.30 – S.32
 Land Officer may allow temporary use of land for purposes under
S.3. of the Act, not exceeding 3 years
 The Land Officer must give a notice in writing & pay compensation
to the persons interested in such lands
 If compensation differ in sufficiency, Land Officer may refer to the
court
 Power to take possession once compensation is paid
 Payment for damages upon expiration of term or if permanently unfit
for use, the Government can acquire the land
 If there is dispute as to the condition of the land, the Land Officer
may refer to the court
 PART VI -
MISCELLANEOUS
S.33 – S.39
 Provisions for serving notice by the Land Officer or the court
 Notice must be served on the person
 If person not available, notice serve to other members of his family,
or posted in a conspicuous place
 Penalty for obstructing survey
 Police can enforce surrender
 Government can withdraw acquisition
 Bar of suits
 Power to make rules to HM in Council
SUMMARY OF THE MAIN
FEATURES
 It is an Act which enables the government to acquire private or
registered land for purposes stated in s3 of the Act.
 Lays our procedures on how acquisition of land under the Act is
carried out.
 It lays out how award of compensation is offered
 S17 & S18 – how award is determined
 When reference or appeals can be made to the Court
 Specifies when payment are made & what happens if payments are
not made at time of possession.
SUMMARY OF THE MAIN
FEATURES (cont.)
 It sets out procedures how and when notices are served prior to
possession of land.
 It sets out penalties for obstruction.
 It bars any suit against the Government.
 It gives the Government right to withdraw the acquisition.
 Gives power to HM the Sultan in Council to make rules consistent
with the Act.