TNB ordered to pay RM1.3mil in late interest to landowner

New Straits Times

03-06-2025

PUTRAJAYA: Tenaga Nasional Bhd (TNB) has been ordered to pay RM1.3 million in late payment interest to a company for delays in compensating it for land used in a transmission line project.
A three-member Court of Appeal panel led by Federal Court judge Datuk Lee Swee Seng said the national utility giant must pay the sum to Lambang Kelana Sdn Bhd after finding that the company had been unfairly deprived of its money for over five years due to administrative delays.
Other members of the bench were Court of Appeal judges Datuk Azimah Omar and Datuk Wong Kian Kheong.
According to court documents, in 2007, TNB had prematurely entered Lambang Kelana's land without due compliance with wayleave procedures under Section 11 of the Electricity Supply Act to install electrical infrastructure.
The section stipulates that utility companies must follow specific procedures before entering private land to install or build electrical infrastructure, including giving formal notice to landowners and paying full compensation for any disturbance or loss of use of the land.
Lambang Kelana was neither served the statutory notice nor paid proper compensation for the loss of the portion of land acquired as wayleave for TNB.
The dispute led to a protracted legal battle, and TNB only paid RM2.1 million in compensation in 2020. However, the payment did not include any interest for the long delay.
In 2021, the Negri Sembilan State Authority decided that Lambang Kelana should receive RM1,369,332.95 in late payment interest for the delay in compensation from October 2015 to December 2020.
However, TNB filed a judicial review to challenge the decision in the High Court and succeeded in getting it overturned.
Azimah, who delivered the unanimous decision in dismissing the lower court's ruling, said the trial judge had misinterpreted the law by adopting a narrow and literal reading of the relevant provisions.
"To deprive the appellant of its rightful late payment charges would certainly transgress upon the appellant's constitutional rights safeguarded under Article 13(2) of the Federal Constitution.
"Despite the delay caused by the Land Administrator, TNB was still unjustly enriched by being able to utilise and earn interest on the monies that were supposed to be paid to Lambang Kelana for the entire duration of the delay," she said.
The appellate court said any interpretation of the law that allows government authorities or licensees to delay compensation with impunity would be unjust.
"We are certain that no statute ever legislated within our nation would promote a statutory authority to delay justice with impunity at the expense of unjust losses incurred against innocent landowners.
"If that be the case, then TNB would stand to unjustly benefit by holding onto monies that should have been paid to landowners, courtesy of delays by the Land Administrator.
"In the meantime, the Land Administrator would not suffer a single sen for the entire duration of the delay. The only party to suffer losses would be the landowner.
"Such an interpretation would truly be absurd and unjust," the court added.
The court also did not make any order for costs.