Mandatory Compensation for Requisitioned Private Facilities under the Disaster Management Act:
A Comprehensive Commentary on SR Educational & Charitable Trust v. State of Kerala (2025 KER 57041)

1. Introduction

The Kerala High Court’s decision in SR Educational & Charitable Trust v. State of Kerala (2025 KER 57041) establishes a significant precedent on the obligation of governmental authorities to compensate private entities whose properties are requisitioned under the Disaster Management Act, 2005 (hereafter “DM Act”). At the height of the COVID-19 pandemic, the petitioner’s Medical College campus—comprising hospital buildings, hostels, and sophisticated medical equipment—was commandeered by the District Disaster Management Authority (DDMA) for use as First-Line and Second-Line COVID Treatment Centres. When the crisis abated, no compensation was forthcoming. The District Collector dismissed the Trust’s claims outright on the ground that the structures were allegedly “unauthorised” and that no provision existed for paying rent for medical equipment.

The Trust approached the High Court seeking: (i) quashing of the impugned order (Ext.P23), and (ii) a direction to assess and disburse compensation forthwith. The matter raised intertwined questions of constitutional property rights (Article 300A), statutory interpretation of Sections 65 and 66 of the DM Act, and administrative fairness.

2. Summary of the Judgment

Justice N. Nagaresh emphatically set aside the Collector’s order. Key holdings include:

1. The State’s power to take possession of private property during a disaster is undeniable, but it is inextricably linked with a corollary duty to pay “just compensation” under Section 66 of the DM Act and Article 300A of the Constitution.
2. Allegations of statutory non-compliance in the construction of a building do not extinguish the owner’s right to rent/compensation when the same building is used by the State. Regulatory violations, if any, must be addressed through separate statutory mechanisms, not by depriving compensation.
3. The Collector’s statement that “there is no provision now to pay rent for medical equipment” is arbitrary; once equipment is requisitioned, compensation must be paid for its use and for any loss or damage.
4. The matter was remitted to the District Collector and the DDMA to reassess and pay the Trust within three months, following the statutory framework.

3. Analysis

3.1 Precedents Cited

Although the judgment is concise and does not parade a battery of citations, its reasoning is clearly anchored in broader constitutional and statutory jurisprudence. The following past decisions implicitly underpin the Court’s stance:

• K.T. Plantation (P) Ltd. v. State of Karnataka (2011) 9 SCC 1 – Articulated that deprivation of property must satisfy the “public purpose – compensation – procedure” triad under Article 300A.
• Jilubhai Nanbhai Khachar v. State of Gujarat (1995) Supp (1) SCC 596 – Clarified that “competent authority” cannot employ arbitrary means to deprive property without fair compensation.
• State of W.B. v. Bela Banerjee AIR 1954 SC 170 – Though pre-Art. 300A, still influential for positing that compensation must be real and not illusory when property is acquired or requisitioned.
• Collector of Jalgaon v. Gajanan (1998) 2 SCC 396 – Reaffirmed that delay or denial of compensation offends constitutional protections.
• Union of India v. G.S. Chatha Rice Mills (2020) 14 SCC 480 – Recognised that statutory powers must be exercised fairly and proportionately in times of emergency.

While these cases are not expressly quoted, the Court’s insistence that the Collector’s reasoning offends Article 300A resonates with the above precedents.

3.2 Legal Reasoning

Justice Nagaresh’s reasoning unfolds in several layers:

1. Statutory Framework of the DM Act
   • Section 65 empowers authorities to requisition resources.
   • Section 66 obliges them to determine and pay compensation “in accordance with such principles as may be prescribed.”
   The Court reads these provisions conjunctively—power and responsibility are twins; one cannot be exercised without the other.
2. Article 300A
   Emphasising that property can be deprived only by “authority of law,” the Court points out that lawful requisition, absent compensation, degenerates into unlawful deprivation.
3. Illegality Argument Rejected
   The Collector’s primary defence was that the relevant buildings lacked certain CRZ and Panchayat approvals, rendering them “unauthorised” and therefore disentitled to rent. The Court counters with three reasons: (i) the Trust produced multiple municipal documents (Exts.P24–P34) evidencing approvals; (ii) even if irregularities existed, they fall within the purview of local-level enforcement, not compensation determination; and (iii) the State is estopped from raising such pleas after voluntarily exploiting the premises for close to two years.
4. Medical Equipment
   The Collector’s statement that there is “no provision now” for paying equipment rent is labelled “highly arbitrary and unacceptable.” By requisitioning equipment worth crores, the State assumed an implied bailment; compensation for use, wear and tear, and loss must follow.
5. Administrative Fairness
   The Court underscores procedural unfairness: the Collector never gave the Trust an effective hearing before rejecting its voluminous claim (over ₹46 crores). This offends natural justice and reinforces the need for reconsideration.

3.3 Impact of the Judgment

The decision carries weight well beyond the immediate dispute:

• Uniform Compensation Duty: Government bodies across India frequently requisition private hospitals, hotels, and vehicles during disasters. The judgment signals that post-use disclaimers such as “unauthorised structure” or “no specific provision” will not shield them from compensation liability.
• Check on Administrative Arbitrariness: District Collectors and DDMAs must now adopt structured, transparent mechanisms—preferably via Rent Committees or expert valuers—to compute compensation promptly, limiting scope for ad-hocism.
• Incentive for Private Sector Cooperation: The ruling reassures private institutions that voluntary cooperation during emergencies will not ruin them financially, thus fostering public-private solidarity in crises.
• Potential Evolution of Rules: States may have to craft detailed rules under Section 66 specifying methodologies for assessing rent, equipment depreciation, and consequential damages, filling the current vacuum highlighted by the Court.
• Article 300A Revitalised: The case rejuvenates property rights discourse by integrating it with disaster management, an area often viewed through a purely public-health lens.

4. Complex Concepts Simplified

Disaster Management Act, 2005 (DM Act)

A central statute providing a framework for preparedness, response, and mitigation during disasters. Sections 65–66 empower authorities to requisition resources but obligate them to pay compensation.

Requisition vs. Acquisition

Requisition is a temporary takeover during emergencies; the owner retains title. Acquisition is permanent transfer of title. Both demand compensation, but requisition typically entails rent or user charges rather than market value.

Article 300A – “Right to Property”

Introduced by the 44^th Constitutional Amendment. It states: “No person shall be deprived of his property save by authority of law.” The article impliedly requires that such “law” must be just, fair, and compensated unless expressly stated otherwise.

Unauthorised Construction

Structures erected without requisite approvals or in violation of zoning laws (e.g., Coastal Regulation Zone norms). However, “unauthorised” does not nullify ownership; it merely exposes the owner to regulatory penalties.

Estoppel

A legal principle preventing a party from asserting something contrary to what is implied by previous conduct. Here, after occupying the Trust’s premises, the State is estopped from claiming it owes nothing.

5. Conclusion

SR Educational & Charitable Trust v. State of Kerala stakes out an essential judicial marker: extraordinary powers under the Disaster Management Act come fused with an equally extraordinary duty to compensate. The Kerala High Court refused to permit post-facto technical objections or bureaucratic convenience to eclipse constitutional guarantees. By remitting the matter with a strict three-month deadline, the Court underscores that compensation is not a benevolence but a legal right.

In the larger legal ecosystem, the ruling is likely to (i) compel state governments to formulate transparent compensation protocols, (ii) invigorate Article 300A jurisprudence, and (iii) foster trust between private stakeholders and public agencies during emergencies. It stands as a reminder that even amid crises, the rule of law—and the rights it protects—does not take a holiday.