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On the methods for establishing the nominal price of land purchased by the state

Case No. 11/96

 

 

THE CONSTITUTIONAL COURT OF

THE REPUBLIC OF LITHUANIA

 

R U L I N G

 

On the compliance of the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the 6 December 1993 resolution (No. 909) of the Government of the Republic of Lithuania with the Constitution of the Republic of Lithuania

 

Vilnius, 18 June 1998

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Egidijus Jarašiūnas, Kęstutis Lapinskas, Zigmas Levickis, Augustinas Normantas, Vladas Pavilonis, Jonas Prapiestis, Pranas Vytautas Rasimavičius, Teodora Staugaitienė, and Juozas Žilys

The court reporter—Daiva Pitrėnaitė

Jadvyga Aleksaitė, Director of the Legal Acts Department at the Ministry of Justice, and Stanislovas Naujalis, Deputy Director of the Department of Territorial Planning at the Ministry of Construction and Urban Planning, both acting as the representatives of the Government of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1 of Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 3 June 1998, in its public hearing, considered case No. 11/96 subsequent to the petition submitted to the Constitutional Court by the Kaunas City Local Court, the petitioner, requesting an investigation into whether the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the 6 December 1993 resolution (No. 909) of the Government of the Republic of Lithuania were in compliance with Articles 23 and 29 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

I

On 14 May 1996, the Kaunas City Local Court, the petitioner, was investigating a civil case subsequent to a petition of the plaintiffs to adopt a supplementary decision and award a pecuniary compensation from the administration of the city of Kaunas administrator for the land purchased by the state. By its ruling, the court suspended the investigation of the case and applied to the Constitutional Court with a petition requesting an investigation into whether the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by government resolution No. 909 of 6 December 1993 (Official Gazette Valstybės žinios, 1993, No. 68-1284) were in compliance with Articles 23 and 29 of the Constitution.

II

The petitioner grounds his request on the following arguments.

Item 2 of the Methods for Establishing the Nominal Price of Land Purchased by the State (hereinafter also referred to as the Methods) provides that the price of land subject to state purchase shall be established by the Methods for the Nominal Price of Land Sold by the State as confirmed by this government resolution, and that the price of land purchased by the state shall be equal to the price of land sold by the state after the deduction of the expenses for land improvement. In the opinion of the petitioner, these both methods contradict each other, therefore, there exist big differences in prices of analogous land plots that are subject to sale and purchase. By applying the Methods, the constitutional principle of equality of all persons before the law is violated, and the ownership right is not protected. Unless the contradictions are cleared up and eliminated, it is impossible to precisely calculate the amount of compensation for land purchased by the state, and thereby to restore the equality of persons before the law and the court which is guaranteed by Article 29 of the Constitution, as well as the right of private ownership protection which is entrenched in Article 23 of the Constitution. The petitioner is of the opinion that it is necessary to establish that, in calculating compensation for land subject to purchase by the state and which is not returned in kind as well as for land subject to sale, one should apply the same methods for value calculation.

III

In the course of preparation of the case for the Constitutional Court hearing, the representative of the party concerned S. Naujalis presented these counter-arguments.

1. In pursuance of Item 4 of Paragraph 1 of Article 12 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” (hereinafter also referred to as the Law), the land which, on the day of the entry into force of this law, was within the administrative boundaries of a town, or territories categorised as town territories, shall be purchased by the state, since, before particular land is categorised as belonging to towns, it has already been planned and specified for the utilisation of public needs, which is in line with Article 23 of the Constitution.

2. The main provision for the evaluation of land purchased by the state is the Second Part (the First Part of the Law in its first wording) of Article 17 wherein the condition is established that the value of the items compensated for the real property purchased by the state must be equivalent to the actual value of the property at the time of purchase, after the deduction of the expenses for its improvement. Following this provision, the methods which are necessary for the calculation of the nominal price of land purchased by the state were prepared and confirmed by government resolutions (resolution No. 473 of 18 November 1991 and resolution No. 909 of 6 December 1993).

3. The value of land purchased by the state is established by subtracting the average expenses for improvement of the said land from the calculated value of land sold by the state. For example, the value of non-agricultural land increases due to the development of urban infrastructure, i.e. because of the installation of streets, water-supply, gas-main, electrical system and telephone network, commercial objects and those of the public purpose the aim of which is to render service to residents, as well as because of the opportunities to develop economic or other activities. In the government resolution such increase of the land value has been provided for that the prices of urban land and agricultural land which is in rural areas could correspond to the proportions that existed in Lithuania until 1940.

In pre-war Lithuania, the Law on Keeping Urban Land provided that in case land is purchased by the state for the needs of society (e.g., building a street), the owner of the land shall not be compensated up to 30 % of the value of the seized land, as after the street had been built, he also enjoyed better conditions due to which the value of the remaining land would increase.

4. At present the price of land purchased by the state in rural areas and most urban districts is higher than the market price for land, therefore, it is not expedient to change the procedure for establishment of the price of land purchased by the state.

In the course of the preparation of the case for the judicial investigation, an explanation of Albinas Kadūnas, a representative of the party concerned, was also received wherein the following arguments were presented.

1. By Article 17 of the Law, the procedure for the calculation of compensation shall be established by the Government. Pecuniary compensation for land which is outside the limits of a town, is not provided for, this land, however, is assessed at a monetary value so that the value of other property that must be allotted instead of it might be calculated.

2. Agricultural land sold by the state is assessed in the same manner as in pre-war Lithuania, i.e. taking account of the ratio of the market price of land, and the price of the stabile commodity, i.e. grain. To assess urban land sold out by the state, the data of the land market investigation carried out in foreign countries were applied by taking into consideration the size of a town, and the position of the land plot with regard to urban, ecological, commercial and other aspects. The value of land purchased by the state is calculated by subtracting the average expenses of the improvement of this land from the established value of the land for sale.

3. The Law contains no requirement to establish individual prices for every land plot according to its actual location. In the Methods, the average land price is established for all urban territory according to the significance and size of towns. By assessing urban land only three conditions were pointed out, i.e., the land which belonged to towns until 1940, the land categorised as belonging to towns until 1 June 1995 (i.e. the agricultural land which had been held by the ownership right) and the agricultural land categorised as belonging to towns after 1 June 1995.

By applying the Methods, the average price (depending on the size of a town) of the land held in towns until 1940 and which is at present purchased by the state, amounts to 28,800–57,600 Lt a hectare, or, in other words, is 18–36 times higher than the price of the agricultural land purchased by the state which is in rural areas. Correspondingly, the average price of the land which was categorised as belonging to towns after 1940 and which is purchased by the state is smaller and amounts to 4,800–9,600 Lt a hectare or, in other words, is 3–6 times higher for the price of agricultural land purchased by the state which is located in rural areas. The value of this land has been increased by taking into consideration the average increase of the market price due to the proximity to a town. The increase of land value has been provided for of the degree so that the ratio between the price of urban land and that of agricultural land which is in rural areas might correspond to the proportions that existed in Lithuania until 1940.

4. In Lithuania, the land market only begins to function, therefore, in many cases land is sold for a price which does not completely correspond to the actual value of land. The price of land purchased by the state as calculated by the Methods is often higher than the present market price of land both in rural areas and in towns (especially smaller ones).

5. The Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the Government were in compliance with the provisions of the Law. In essence, these Methods are based on the calculation principles of the Methods for Establishing the Nominal Price of Land Sold by the State, therefore, they are in conformity with the latter.

6. Any variation in the methods for the calculation of land price made in an attempt to assess every plot individually would condition a very great social inequality and would lead to negative consequences. Certain citizens, if compared to other citizens, would undeservedly get very big compensations for the land taken by the state, while this would be especially unfair with regard to the citizens for whom decisions were adopted to restore the right to land property by paying pecuniary compensations (such compensations have been calculated for the sum of more than 700 million Lt). The application of new methods would remove the end of land reform for many years.

In the course of the preparation of the case for the judicial investigation, similar arguments were presented by the representative of the party concerned Pranas Aleknavičius.

IV

In the court hearing, the representative of the party concerned S. Naujalis virtually reiterated the arguments set forth in his paper.

In the court hearing the representative of the party concerned J. Aleksaitė explained that the petitioner by wishing to decide the issue of the amount of compensation, it seems, made a mistake and did not take account of the fact that the state purchase of land from proprietors under the law on restitution of the ownership rights of citizens to the existing real property and the purchase of state land are different matters. In this case there are different subjects and different relations. These issues are regulated by different legal norms and different laws. Purchasing state land is accomplished according to a sale and purchase agreement which is regulated by the Law on Land and the Law on Land Reform. In this case the agreement is based on the free will and equality of the parties. According to it, the state, as a subject of the ownership right, commits itself to sell its property, i.e., land in this case, to the purchaser for the agreed price. No one may force to make such an agreement. The state purchase carried out under the law on restitution of the ownership rights of citizens to the existing real property means that the institutions authorised by the state are entitled to adopt a decision to purchase land under prescribed conditions for the needs of society, and this does not depend on the will of the former owners. State purchase of property is not a voluntary transfer of property but its seizure by compensating its value.

In the opinion of the representative of the party concerned, there exists no contradiction between the methods for the establishing of the price for land sold and those for land purchased by the state. The Law on Land, as well as the Law on Land Reform, obligates the Government to establish the procedure for assessment of land sold by the state. Under the law on restitution of the ownership rights of citizens to the existing real property, the state purchase of land and the amount of extraordinary compensation or the value of the transferred property shall be established taking account of the actual value of the purchased property at the time of purchase, after the deduction of the expenses for its improvement. Thus, there is not any violation in that the Government approved by the same resolution two types of Methods and established that the price of land purchased by the state shall be equal to the price of land sold by the state after the deduction of the expenses for land improvement, thus, one type of Methods does not contradict the other one.

In the court hearing, the specialist Juozas Benjaminas Dubickas, an adviser to the minister of agriculture, explained that the prices of land purchased by the state and that sold by the state are calculated by means of the same method, and only the coefficients are different. It is quite reasonable that smaller coefficients are applied when land is purchased by the state. By selling land, the state applies the coefficients according to the present situation so that it could accumulate funds, solve other economic issues, as well as pay for land purchased by it. It might be possible that not everywhere the coefficients have been concretely and precisely established, but one lacks the necessary data, nor is there any investigation into the land market. The calculations are generalised. By implementing a new law on the restitution of the rights of ownership, a new government resolution on the price of land subject to state purchase is drafted, however, the principles for the establishment of the price of land purchased by the state are left the same. They are not impugned by anyone.

The Constitutional Court

holds that:

On 6 December 1993, the Government adopted the Resolution (No. 909) “On the Procedure for Establishment and Application of the Nominal Price of Land Sold and Land Purchased by the State”. The petitioner doubts whether the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the said government resolution were in compliance with Articles 23 and 29 of the Constitution.

In deciding this question, first of all one should note the fact that in the system of the sources of legal acts, the legal acts adopted by the Government are designated as substatutory acts. Therein the norms of laws are particularised, as well as their implementation is regulated. For instance, Item 4.1 of the aforesaid resolution provides that the nominal price of land purchased by the state which is calculated pursuant to the methods confirmed by this resolution shall be applied when one compensates for land or woodland purchased by the state and to which the right of ownership is restored. Therefore, when assessing the Methods for Establishing the Nominal Price of Land Purchased by the State, it is important to take account of the fact as to how and in what scope the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” regulated the state purchase of the existing real property, as well as what questions of legal regulation the Government was commissioned to decide in this sphere by the Law. It is possible to decide the conformity of the Methods with particular articles of the Constitution only by taking account of the interaction of the norms consolidated in the Methods with respective provisions and norms of the law on the restoration of the rights of ownership. Therefore, the arguments on which this ruling of the Constitutional Court is based will be set forth in such a sequence.

1. It should be noted that the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” adopted on 18 June 1991 gave preference to returning the property in kind. Alongside, the Law provided for the state purchase of the existing real property from the persons to whom the rights of ownership were subject to restoration. Article 12 of the Law established the situations when the land for the needs of the state as well as other land had to be purchased. By Article 16 of the Law, the methods of compensation for the land purchased by the state were: (1) transferring the owner, free of charge, rights to different property of the same type or value as ownership; (2) giving extraordinary state payments or allotting shares to the owner; (3) making void financial liabilities of a citizen to the state which were incurred after the appropriation of real property. Article 17 of the Law prescribed that in the state purchase of the existing real property, thus, including land, the amount of extraordinary state payments shall be based on the actual value of the property at the time of purchase, after the deduction of the expenses for its improvement.

Article 17 also commissioned the Government to establish the procedure for the calculation and allocation of payments.

On 18 November 1991, the Government adopted the Resolution (No. 473) “On the Establishment of the Nominal Price of Saleable Land, Forest and Water Bodies and the Procedure for Their Purchase by the State” by which the Methods for the Establishment of the Price of Land Purchased by the State and the Methods for the Establishment of the Nominal Price of Saleable Land, Forest and Water Bodies were approved. In the general part of the said government resolution it was prescribed that the average (nominal) price for land purchased by the state which had been held by the private ownership shall be 4,000 roubles a hectare in rural areas, while the average nominal price of the land for agricultural purposes which was sold was 5,000 roubles a hectare.

Thus, already by starting regulating the restoration of the rights of ownership by the Law, one consolidated the provision that, by establishing the amount of compensation for property purchased by the state, in respective cases the expenses of property improvement had to be deducted. Taking account of this fact, the said government resolution provided for a smaller price of land purchased by the state than that of land sold by the state.

2. Both legal and substatutory regulation of payments and compensations for the existing real property purchased by the state has undergone changes. After the Seimas had amended and supplemented the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” on 12 January 1993, Article 17 of the said Law was expanded: a new provision of the equivalence of property purchased by the state and that transferred in kind was consolidated therein. The former norm was also supplemented by establishing that the expenses for property improvement shall be deducted not only in the cases of allocation of extraordinary state compensations but also by allotting shares for property purchased by the state.

Besides, on the same day, 12 January 1993, instead of the former commissioning to the Government to establish the procedure for the calculation and allocation of payments as contained by Article 17, the following norm was adopted: “The procedure for the calculation of payments, as well as for their allocation, shall be established by the Government of the Republic of Lithuania.” After such an amendment had been adopted, a question might be raised whether the Government would be entitled to continue establishing the procedure for the calculation of payments, i.e. deciding the questions of the price of land subject to state purchase. In this case, however, the fact is of importance that the restoration of the rights of ownership to land and land reform are inseparable processes the legal regulation whereof is linked in most cases. Under the Law on Land Reform, the main goal of land reform is to implement the right of Lithuanian citizens to land ownership and utilisation by returning the disseised land in accordance with the procedures and terms established by law by transferring or allotting it as ownership for no consideration. The Seimas Resolution “On the Procedure for the Implementation of the Republic of Lithuania’s Law ‘On the Amendment of and Supplement to the Republic of Lithuania’s Law of Land Reform’” of 15 July 1993 was designated for the legal regulation of these interrelated processes. The said resolution suggested that the Government prepare several resolutions, among them also a resolution providing for the establishment of the procedure of the price of land purchased by the state. Thus, on the legal basis, the question of legitimacy of subsequent government decisions in this sphere of legal regulation was solved.

On 6 December 1993, while accomplishing the commissioning of the legislature, the Government adopted the Resolution (No. 909) “On the Procedure for Establishment and Application of the Nominal Price of Land Sold and Land Purchased by the State”. By this government resolution, as before, separate methods for establishing the nominal price of land sold and purchased by the state were confirmed.

It should be noted that, on 30 May 1995, when the aforesaid government resolution was in force, Article 17 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” was expanded once again, and it was additionally established in Paragraph 2 thereof that the value of the plot of land or woodland allocated free of charge for the existing real property purchased by the state shall be established taking account of the actual value of the existing real property at the time of purchase, after the deduction of the expenses for its improvement. After that, the discussed norms of the government resolution have not been changed.

The petitioner, calling in question the compliance of the Methods for Establishing the Nominal Price of Land Purchased by the State with the Constitution, notes that under Item 2 of the said Methods “the price of land purchased by the state shall be equal to the price of land sold by the state after the deduction of the expenses for land improvement”. The petitioner contends that the methods for establishing the nominal price of land sold and purchased by the state contradict each other. By applying both said Methods, there occur big differences in prices between analogous plots of land sold and that purchased by the state. Due to such legal regulation, the right of ownership is not protected. Therefore, the petitioner is of the opinion that the Methods for Establishing the Nominal Price of Land Purchased by the State contradict Article 23 of the Constitution.

3. Article 23 of the Constitution provides:

Property shall be inviolable.

The rights of ownership shall be protected by law.

Property may only be seized for the needs of society according to the procedure established by law and must be adequately compensated for.”

The function of these constitutional norms is many-sided. The chief purpose of the norms entrenched in Article 23 of the Constitution is to secure protection of the subjective rights of the person to ownership of property he possesses. As regards the constitutional guarantee of property inviolability, it should be noted that in the legal language the word inviolability is, as a rule, understood as an inviolable, inalienable human right. In this respect the fact is of great importance that the Constitution itself establishes the requirements of protective nature which should be observed when a necessity arises to seize private property for the needs of society. The seizure of property for the needs of society as indicated by Paragraph 3 of Article 23 of the Constitution is understood as an individual decision concerning seizure of private property held as private ownership which is made in every concrete case according to the procedure established by law.

In accomplishing restitution, the state purchase of land or other real property for the needs of the state from citizens who are subject to the restitution of the rights of private ownership is a legal act of somewhat different nature. In fact, the property which former belonged to these persons is at present managed by the state. Until respective state institutions have not adopted a decision on the restoration of the rights of ownership, in reality, such persons do not enjoy the subjective rights to the property which earlier belonged to them, therefore, they cannot directly make use of the constitutional guarantee of property inviolability. However, in this case it is important to note a wider aspect of Article 23 of the Constitution. It is evident that by means of the constitutional guarantee of property inviolability, as well as the constitutional regulation of seizure of private property for the needs of society, the possibility of general nationalisation for no consideration has been denied. Such understanding of the function of Article 23 of the Constitution also presupposes the fact that, by restoring the ownership rights of citizens unlawfully and universally denied by the occupation government, one must follow the principle of fair compensation for property purchased by the state. This is in line with the attempt to restore justice in respect to the people who suffered from the occupation government. By the way, in its ruling of 27 May 1994, in deciding the question of the compliance of the norms of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” with the Constitution, the Constitutional Court held that providing there is no possibility of restoring property in kind, fair compensation also ensures the restoration of the rights of ownership.

4. The scale of the restoration of ownership rights, the absence of the settled land marked at the beginning of the process of restitution, and limited material and financial capacities of the state conditioned the fact that the state itself established the price of land subject to state purchase. As mentioned, on the commissioning by the legislature, the Government confirmed the Methods for Establishing the Nominal Price of Land Purchased by the State.

Item 2 of the Methods, which is indicated by the petitioner in his petition, prescribes:

The price of land purchased by the state by transferring plots of land and woodland of equal value (i.e. by returning land and forest in equivalent kind) for no consideration shall be established by assessing the plots of land or woodland by the Methods for Establishing the Nominal Price of Land Sold by the State as confirmed by this Resolution. The price of land purchased by the state shall be equal to the price of land sold by the state after the deduction of the expenses for land improvement.”

It should be noted that the aforementioned item of the Methods contains 2 autonomous norms. In the first of these norms it is established that in the case that another plot of land is allocated in another location instead of agricultural land purchased by the state, i.e. in case land is returned in equivalent kind, the land subject to state purchase shall be assessed by the Methods for Establishing the Nominal Price of Land Sold by the State. The deduction of the expenses for the improvement of land purchased by the state is not mentioned therein. In this case more favourable conditions (the expenses of land improvement are not deducted) provided for are to be linked with the attempt entrenched in the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” to restore justice by returning in kind the existing real property to citizens. The circumstance that by compensating in equivalent kind the agricultural land subject to state purchase the expenses for land improvement were not to be deducted might induce the citizen to opt for such a form of compensation, namely, that in equivalent kind.

In its turn, the second norm of Item 2 of the Methods provides that in case the land subject to state purchase is compensated not in equivalent kind but other ways, the expenses of land improvement shall deducted. This norm of the substatutory act particularises the principle entrenched in Article 17 of the Law by which the starting-point of compensation of property purchased by the state is the value of the property at the time of seizure from its legitimate owners. Thus, when one assesses land which is within the administrative boundaries of a town, the fact is of importance whether the land belonged to the town until 1940, or whether agricultural land was categorised as belonging to the town later. The deduction of the land improvement expenses is not, in itself, incompatible with the provision of fair compensation.

It is important that one also paid heed to the requirement of fairness in establishing the land price calculation criteria. In the context of the case at issue, it should be noted that, due to various reasons, as well as the absence of the possibility of an individual assessment of every plot of land subject to state purchase, the Methods have established the average price of land purchased by the state for the whole urban territory while taking account of the significance and size of the town. According to the data of the representative of the person concerned, the average price (depending on the size of a town) of the land held in towns until 1940 and which is at present purchased by the state, amounts to 28,800–57,600 Lt a hectare, or, in other words, is 18–36 times higher than the price of the agricultural land purchased by the state which is in rural areas. Correspondingly, the average price of the land which was categorised as belonging to towns after 1940 and which is purchased by the state is smaller and amounts to 4,800–9,600 Lt a hectare or, in other words, is 3–6 times higher for the price of agricultural land purchased by the state which is located in rural areas. The value of this land has been increased by taking into consideration the average increase of the market price due to the proximity to a town. The increase of land value has been provided for of the degree so that the ratio between the price of urban land and that of agricultural land which is in rural areas might correspond to the proportions that existed in Lithuania until 1940.

It goes without saying, in the process of restitution, the application of the provision on the deduction of the land improvement expenses presupposes the difference in the price of land purchased by the state and the price of land sold by the state. This difference depends on a number of factors. For example, the value of non-agricultural land increases due to the development of urban infrastructure, i.e. because of the installation of streets, water-supply, gas-main, electrical system and telephone network, commercial objects and those of the public purpose the aim of which is to render service to residents, as well as because of the opportunities to develop economic or other activities. By establishing the price of land purchased by the state, one takes into consideration the average expenses which were made in the process of land improvement. It should be noted that the petitioner did not present any concrete arguments as regards the criteria indicated in the government resolution under which the increase in the land value is established.

When one decides the question raised by the petitioner on insufficient protection of private ownership in the discussed government resolution, one should mention an important means of the protection of the rights of citizens to whom the ownership rights are restored which are provided by Article 17 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”. Under Paragraph 3 of the said article, in establishing the size of payments, the type and number of allotted shares as well as transferring property in kind, the consent of the citizen had to be given. While Item 8 of the Methods for Establishment of the Nominal Price of Land Purchased by the State which was designated for the implementation of the said norm of the Law provides that in case the citizen disagrees with the price of land subject to state purchase calculated in accordance with the established procedure, at his request the plot of land shall be assessed by other methods indicated in this Item of the Methods. The citizen was entitled to appeal against the final decisions of respective institutions on the restoration of the rights of ownership to court (Article 20 of the Law).

5. The petitioner also contends that unless the contradictions are cleared up and eliminated, it is impossible to precisely calculate in each particular case the amount of compensation for land purchased by the state, and thereby to secure the equality of persons before the law and the court which is guaranteed by Article 29 of the Constitution. Not pointing out any particular contradictions, the petitioner believes that in calculating the price of land sold and that purchased by the state one should apply the same methods for value calculation.

Article 29 of the Constitution provides:

All persons shall be equal before the law, the court, and other State institutions and officials.

A person may not have his rights restricted in any way, or be granted any privileges, on the basis of his or her sex, race, nationality, language, origin, social status, religion, convictions, or opinions.”

The constitutional principle of the equality of all persons before the law, the court, and other state institutions and officials must be observed when laws are passed, applied and when justice is administered. This constitutional principle, however, does not deny the fact that the law may establish different legal regulation in respect of certain categories of persons which are in different situations.

In the case at issue, such a defined category of persons is the persons to whom the rights of ownership are restored. As is well known, in this country the implementation of limited restitution was regulated by the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”. The Law provided for the restoration of the ownership rights to not all former owners nor to the whole former possessed property. That was a compromise decision as one sought to restore justice in respect to the people who had suffered from the occupation government, however, one had to take account of the existing socio-economic relations and factual possibilities of the accomplishment of the restitution. Thus, establishment of conditions of the restoration of the ownership rights is a prerogative of the legislature. One of important conditions of the restoration of the ownership rights is that when one compensates property purchased by the state the expenses of its improvement are deducted. The Constitutional Court has already argued in this ruling that the deduction of the expenses for property improvement is in line with the constitutional requirements of property protection. Alongside, the Constitutional Court notes that the legal regulation of compensation for property purchased by the state was conditioned, among other factors, by limited material and financial capacities of the state. When the state undertakes a respective liability by the law, it must be grounded on material and financial resources, otherwise the law becomes ineffective. Therefore, taking into consideration the capacities of the state, respective amounts of compensation for property purchased by the state may be established. The amounts of compensation provided for by the Methods as confirmed by the government resolution do not constitute the grounds to assess them as fair or unfair. In addition, in the context of the equality of rights of all members of society, the fact is of importance that the obligation assumed by the Law to pay corresponding compensation to a certain category of persons for property purchased by the state virtually falls on the other members of society.

In assessing the argument of the petitioner that in calculating the price of land sold and that purchased by the state the same methods for value calculation should be applied, one must pay attention to the fact that in both cases the price is in essence calculated following the same principles. Under Item 2 of the Methods for Establishing the Nominal Price of Land Purchased by the State, when land is purchased by the state from the persons to whom the rights of ownership must be restored, the plot of land shall be assessed under the Methods for Establishing the Nominal Price of Land Sold by the State. The price of land purchased by the state is determined after the expenses for land improvement are deducted from thus established price. Thus, the Government, by implementing the Law, confirmed the Methods for Establishing the Nominal Price of Land Sold by the State and individual Methods for Establishing the Nominal Price of Land Purchased by the State. Every of these methods are to be applied to different relations and different categories of persons. There are not any legal arguments which could substantiate the fact that the application of the government resolution, the Methods for Establishing the Nominal Price of Land Purchased by the State in particular, does not secure the constitutional principle of persons’ equality before the court.

In view of the foregoing arguments and reasoning, the conclusion should be drawn that the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the government resolution are in compliance with Articles 23 and 29 of the Constitution.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

To recognise that the Methods for Establishing the Nominal Price of Land Purchased by the State as confirmed by the 6 December 1993 resolution (No. 909) of the Government of the Republic of Lithuania are in compliance with the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:

 

Egidijus Jarašiūnas      Kęstutis Lapinskas       Zigmas Levickis

 

Augustinas Normantas      Vladas Pavilonis       Jonas Prapiestis

 

Pranas Vytautas Rasimavičius      Teodora Staugaitienė      Juozas Žilys