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TMI Blog2024 (9) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... .......................18 B. Return of acquired land under the 2013 Act ..........................25 C. Impugned Order of the High Court .....................................28 D. Role of the State under Article 300-A of the Constitution ............30 VIII. CONCLUSION ..............................................................37 1. Leave Granted. 2. This appeal arises from the order passed by the High Court of Himachal Pradesh at Shimla dated 12.07.2022 in Civil Writ Petition No. 2350/2018 filed by the Respondent Nos. 1 to 6 herein (original petitioners) by which the High Court allowed the writ petition and directed the Appellant herein to pay the requisite amount towards compensation as determined in the Supplementary Award dated 02.05.2022 passed by the Land Acquisition Collector, Arki ("LAC") (Respondent No. 10) in the first instance with liberty to recover the same from M/s Jaiprakash Associates Limited ("JAL") (Respondent No. 11) if permissible under the legal relationship between the two companies. I. FACTUAL MATRIX 3. The State of Himachal Pradesh (Respondent No. 7) issued a notification dated 25.07.2008 under Section 4 of the Land Acquisition Act, 1894 (the "18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation to the tune of Rs. 10,77,53,842.27/- (Rupees Ten Crore Seventy Seven Lakh Fifty Three Thousand Eight Hundred and Forty Two and Twenty Seven paisa Only) along with the incidental charges @ 2% amounting to Rs. 9,09,315.12/-. The LAC clarified in the award passed by him that the compensation amount towards the houses and other structures constructed prior to the date of notification under Section 4, whose survey was not allowed by the landowners during the acquisition proceedings would be considered in the supplementary award that may be passed separately after the reports regarding the valuation of structures were received. 8. The amount as determined under the Award dated 08.06.2018 was deposited by JAL and disbursed to the landowners. The possession certificate dated 07.06.2019 in respect of the subject land was issued in favour of JAL. Subsequently, the entries in the revenue record of the subject land in favour of JAL came to be mutated on 12.11.2020. 9. Being dissatisfied with the Award dated 08.06.2018, the Respondent Nos. 1- 6 herein filed writ petition no. 2350 of 2018 before the High Court on 16.09.2018, praying for a direction to the LAC to pass a supplementary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Scheme for the purpose of determining the issue as to who should pay the compensation amount determined under the Supplementary Award to the Respondent Nos. 1-6 respectively. 14. On 12.07.2022, the High Court relying on Clause 7.1 of the Scheme, passed the impugned order, directing the Appellant to pay the compensation amount at the first instance and left it open for the Appellant to recover the same from JAL later, if permissible in law. 15. In view of the aforesaid, the Appellant is before this Court with the present appeal. II. SUBMISSIONS ON BEHALF OF THE APPELLANT 16. Mr. Navin Pahwa, the learned senior counsel appearing for the Appellant made the following submissions: a. The High Court, in its impugned order, erred in directing the Appellant to pay the compensation amount determined under the Supplementary Award because the initial Award dated 08.06.2018 as well as the Supplementary Award dated 02.05.2022 were passed by the LAC fixing the liability to pay compensation on JAL. b. The High Court failed to consider that under the Scheme between the Appellant and JAL, as sanctioned by NCLT, Mumbai on 15.02.2017 and NCLT, Allahabad on 02.03.2017, all contingent li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o brought our attention to the order passed by this Court dated 16.12.2019 in Ultratech Cement Ltd. v. Tonnu Ram, SLP (C) (Diary) No. 42997 of 2019 wherein this Court clarified that the impugned judgment of the High Court of Himachal Pradesh could not have been construed as permitting third party to pursue claim for recovery against the Appellant in disregard of the Scheme and the executing court would be duty-bound to examine the purport of the Scheme and pass orders strictly in consonance therewith. The relevant observations made by this Court in Tonnu Ram (supra) are reproduced below: "...It cannot be construed as permitting third party to pursue claim for recovery against the petitioner in disregard of the scheme of arrangement propounded by the NCLT in respect of respondent No.4- M/s. Jaiprakash Industries. Despite this clear position, if any third party intends to pursue remedy against the petitioner, the Executing Court would be duty bound to examine the purport of the stated scheme propounded by the NCLT and pass orders strictly in consonance therewith. It would be open to the petitioner to invite attention of the Executing Court or any other Forum about the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-se dispute with the intention of depriving the original landowners of their legitimate right to receive compensation due to them. e. The subject land was acquired for public purpose and was being utilized by the Appellant for its purposes. IV. SUBMISSIONS ON BEHALF OF THE RESPONDENT NO. 10 18. Mr. Puneet Rajta, the learned Additional Advocate General appearing for the Respondent No. 10 i.e., the Land Acquisition Collector, Arki made the following submissions: a. The subject land was acquired in the year 2018 for providing a safety zone to the cement plant which had already been taken over by the Appellant in the year 2016. b. The acquired land is being utilized by the Appellant as a safety zone for the cement plant being run by them. However, the land is recorded in the name of JAL. c. The role of the State was limited to the extent of initiating the acquisition proceedings and as per the MOU signed with the Government of Himachal Pradesh, all costs pertaining to the acquisition/transfer of land would be borne by the company only. It was clarified that the State had no role to play in the business of manufacturing or running the cement plant of the company and all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 yet the physical possession of this land remained with the villagers/landowners including Respondent Nos. 1-6 who had illegally occupied the subject land and had constructed houses/structures on the same even after the deliverance of the Award dated 08.06.2018 and the Supplementary Award dated 02.05.2022. d. It was submitted that the substantial delay in the issuance of the Award by the LAC had frustrated the purpose of acquisition for JAL. Since the entire project has been under the custody and possession of the Appellant, it is the appropriate party to address the issue of the requirement of the subject land for the purpose of Mining Activities & Safety Zone. If the Appellant is not interested in the subject land, then the same should be returned to the original landowners (Respondent Nos. 1-6 herein) and the amount deposited as an award of Rs. 10,77,53,842/- in the year 2018 should be refunded to JAL. e. Mr. Kumar contended that according to the statement provided by the Appellant to the High Court, it can be reasonably concluded that the Appellant does not require the land in question, which was acquired for the purpose of Mining Activities and Safety Zone for the Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supplementary Award for the said land can be imposed on the Appellant despite the said land not being in its name? 22. Clause 1.1 (o) defines the "Effective Date" as the date on which the Scheme becomes effective in accordance with its terms, which shall be the Closing Date [defined in Clause 1.1(k) and Clause 10.1]. The said date was decided to be 29.06.2017 among the parties. 23. Clause 1.1(w) defines the business and assets transferred by JAL to the Appellant. The definition of the same is reproduced below: "...(w) "JAL Business" means the business of manufacturing, sale and distribution of cement and clinker manufactured at the JAL Cement Plants, including all rights to operate such business, its movable or immovable assets, captive power plants, DG sets, coal linkages, rights, privileges, liabilities, guarantees, land, leases, licenses, permits, mining leases, prospecting licenses for mining of limestone, letters of intent for mining of limestone, tangible or intangible assets, goodwill, all statutory or regulatory approvals, logistics, marketing, warehousing, selling and distribution networks {marketing employees, offices, depots, guest houses and ether related facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng before any statutory or judicial or quasi-judicial authority or tribunal) by or against the Transferor1 and /or the Transferor2, initiated on or arising and pending before the Effective Date, and relating to the JAL Business and the JCCL Business shall remain with the Transferor1 and/or the Transferor2, as the case may be. 7.2 In the event any case or matter pertaining to contingent liabilities being in the nature of disputed claims, not crystallized on the Closing Date or guarantees listed in Schedule III A and Schedule XI A or any similar instrument by whatsoever name called which have been advance against disputes related to the JAL Business or the JCCL Business existing on the Closing Date, or pertaining to NPV of afforestation charges in respect of mining land being Block 1, 2, 3, 4 and Ningha of Dalla Plant and Jaypee Super Plant, by force of law are transferred to the Transferee, then the Transferor1 and the Transferor 2, shall have full control in respect of the defence of such proceedings including filing the necessary appeals, revisions, etc.. provided that the Transferor1 and the Transferor2, as the case may be, shall not, take any action that is detrimental to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings came to an end on 23.06.2016. As the next step towards the proceedings, an Award dated 08.06.2018 was passed. The facts indicate that the land acquisition proceedings had commenced before the Effective Date of the Scheme (i.e. 29.06.2017) and the compensation remained undetermined as on the Effective Date. To our understanding, these facts attract the application of Clause 7.1 of the Scheme as the acquisition proceedings and the liability to pay compensation associated with it squarely falls within the meaning of 'other proceedings' as intended by the parties under the said Clause. 28. JAL has also not disputed that it had made payment of the amount determined under the Award of 2018 i.e., Rs. 10,77,53,842/- after the Effective Date of the Scheme. The said amount has already been disbursed to the landowners. There is nothing on record to show that the payment of compensation amount at that time was contested by JAL. 29. Further, the exercise of determination of compensation amount which is a part of the acquisition proceedings remained pending even after the Effective Date of the Scheme. After the LAC determined the amount under the Award dated 08.06.2018, JAL paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Section 101 of the 2013 Act which is reproduced below : "101. Return of unutilised land.- When any land acquired under this Act remains unutilised for a period of five years from the date of taking over the possession, the same shall be returned to the original owner or owners or their legal heirs, as the case may be, or to the Land Bank of the appropriate Government by reversion in the manner as may be prescribed by the appropriate Government. Explanation.-For the purpose of this section, "Land Bank" means a governmental entity that focuses on the conversion of Government owned vacant, abandoned, unutilised acquired lands and tax-delinquent properties into productive use." [ Emphasis Supplied ] 35. The necessary conditions for the application of Section 101 are: (1) the land should be unutilized; and (2) the period it remains not in use should be at least five years from the date of taking of possession. 36. We do not find any merit in the contention of JAL that the land be returned to the original landowners. While we agree that a period of five years has elapsed from the date of taking of possession by JAL, the first condition that the land should remain unutili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also recorded in the Award of 2018. We find that the passing of Supplementary Award was not a fresh exercise but rather a continuation/extension of the Award of 2018. Therefore, when JAL has already paid the compensation amount as determined under the previous Award without any demur, it cannot be allowed to question its liability under the Supplementary Award and make a plea for return of the land at this stage on the ground that the purpose of the land is frustrated due to delay in acquisition proceedings. 40. At this stage, it is necessary for us to discuss the purport of Section 101 of the 2013 Act. The instant section was introduced in the 2013 Act for the first time as a beneficial provision for the landowners whose lands were usurped but remained unutilized or were not used in accordance with the purpose stated in the notifications under Section 4. However, the application of the Section is warranted only in the circumstances where the return of the land would benefit the landowners. The party which has failed to utilize the land cannot plead for the return of the land and consequent refund of the compensation paid, as that would tantamount to taking advantage of its own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/her property. The relevant observations of this Court under the said judgment are reproduced below: "...27. ... Seven such sub-rights can be identified, albeit non - exhaustive. These are: i) duty of the State to inform the person that it intends to acquire his property - the right to notice, ii) the duty of the State to hear objections to the acquisition - the right to be heard, iii) the duty of the State to inform the person of its decision to acquire - the right to a reasoned decision, iv) the duty of the State to demonstrate that the acquisition is for public purpose - the duty to acquire only for public purpose, v) the duty of the State to restitute and rehabilitate - the right of restitution or fair compensation, vi) the duty of the State to conduct the process of acquisition efficiently and within prescribed timelines of the proceedings - the right to an efficient and expeditious process, and vii) final conclusion of the proceedings leading to vesting - the right of conclusion..." [ Emphasis Supplied ] This Court held that a fair and reasonable compensation is the sine qua non for any acquisition process. 44. In Roy Estate v. State of Jharkhand, (2009) 12 SCC 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation to the land losers, otherwise there would be a breach of Article 300-A of the Constitution. 48. In the present case, the Government of Himachal Pradesh as a welfare State ought to have proactively intervened in the matter with a view to ensure that the requisite amount towards compensation is paid at the earliest. The State cannot abdicate its constitutional and statutory responsibility of payment of compensation by arguing that its role was limited to initiating acquisition proceedings under the MOU signed between the Appellant, JAL and itself. We find that the delay in the payment of compensation to the landowners after taking away ownership of the subject land from them is in contravention to the spirit of the constitutional scheme of Article 300A and the idea of a welfare State. 49. Acquisition of land for public purpose is undertaken under the power of eminent domain of the government much against the wishes of the owners of the land which gets acquired. When such a power is exercised, it is coupled with a bounden duty and obligation on the part of the government body to ensure that the owners whose lands get acquired are paid compensation/awarded amount as declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vents. It is regrettable that the State of Himachal Pradesh, being a welfare state, did not ensure payment of compensation to the Respondent Nos. 1-6 before taking possession of their land. In fact, the landowners had to approach the High Court to seek directions to the LAC for passing of the supplementary award which was finally passed on 02.05.2022 that is, after a period of almost four years from the date of passing of the Award of 2018. 53. Further, the acquisition proceedings for the subject land had commenced vide the notification under Section 4 dated 25.07.2008. In such circumstances it is necessary to consider the relevant provisions of the 1894 Act, more particularly Section 41 thereof which pertains to the process required to be followed in cases of acquisition of land for companies. The relevant portion of Section 41 of the 1894 Act is reproduced below : "41. Agreement with appropriate Government. - If the appropriate Government is satisfied [after considering the report, if any, of the Collector under section 5A, sub-section (2), or on the report of the officer making an inquiry under section 40 that the proposed acquisition is for any of the purposes referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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