Supreme Court of India
ANIL AGARWAL FOUNDATION ETC. ETC.versusSTATE OF ORISSA AND ORS.
- Citation
- 2023 INSC 361
- Decided
- 12 April 2023
- Disposal
- Dismissed
- Bench
- M R SHAH
Holding
The acquisition proceedings were void because the appellant was a private company at the relevant time, the State failed to comply with mandatory provisions of the Land Acquisition Act, 1894 and the 1963 Rules, and the process violated the doctrine of public trust and Article 14.
Summary
The Anil Agarwal Foundation, a private company at the time of land acquisition, sought 6,000 acres of agricultural land in Odisha to establish a university. The State issued Section 4(1) notifications and proceeded with acquisition despite the company’s conversion to a public company occurring only after the notifications and without complying with mandatory provisions of the Land Acquisition Act, 1894 and the 1963 Rules. The High Court quashed the acquisition, finding violations of Section 44B, non‑compliance with Rules 3 and 4, failure to conduct a proper inquiry under Section 5A, and an unlawful grant of favour to the private entity, breaching the doctrine of public trust and Article 14. On appeal, the Supreme Court affirmed the High Court’s findings, holding that the acquisition was illegal and vitiated by mala‑fide actions and statutory non‑compliance. Consequently, the appeals were dismissed and the State was directed to restore possession to the landowners and refund compensation.
Issues considered
- The status of Anil Agarwal Foundation as a public company under Section 3(1)(IV) of the Companies Act, 1956 and its eligibility for land acquisition.
- Whether land can be acquired for a private company under Section 44B of the Land Acquisition Act, 1894.
- Compliance with mandatory provisions of Sections 39, 40, 41 and Rules 3(2) and 4 of the Land Acquisition (Companies) Rules, 1963 before issuing Section 4(1) notifications.
- Whether the Collector was required to conduct an inquiry under Section 5A and submit a report as mandated by Rule 4.
- Whether the failure of landowners to file objections under Section 5A amounts to waiver of their rights.
- Whether the Core Committee constituted by the State satisfied the requirements of Section 40(2) and could dispense with the Land Acquisition Committee under Rule 3.
- Validity of the Memorandum of Understanding and Section 41 agreement executed by the foundation.
- Environmental implications, including the doctrine of public trust, impact on two rivers and a nearby wildlife sanctuary.
- Whether the acquisition proceedings should be quashed on grounds of violation of Article 14 and public interest.
- Whether the reliefs sought in the public interest litigation are maintainable.
Legislation cited
- Companies Act, 1956s. 44, s. 44B
- Constitution of Indias. Article 14, s. Article 39A
- Land Acquisition Act, 1894s. 39, s. 40, s. 4(1), s. 41, s. 44B, s. 5A, s. 6
- Land Acquisition (Companies) Rules, 1963s. 3, s. 4
Subjects
land acquisitionpublic companyprivate companySection 44Bdoctrine of public trustenvironmental lawwildlife sanctuarypublic interest litigationArticle 14Section 5Amandatory procedural compliance
Judgment
[2023] 8 S.C.R. 969 969
ANIL AGARWAL FOUNDATION ETC. ETC. A
v.
STATE OF ORISSA AND ORS.
(Civil Appeal Nos. 1144-1146 of 2011)
APRIL 12, 2023 B
[M. R. SHAH AND KRISHNA MURARI, JJ.]
Land Acquisition Act, 1894 – ss. 4(1), 6, 44B – Land
Acquisition Rules, 1963 – rr. 3 & 4 – Acquisition Proceedings –
Allotment of land – To Private Company – For setting up of
C
University – Undue Favour to Company – Non-compliance of
Mandatory Provisions – Doctrine of Public Trust – Violation of –
Appellant, a private company at that time, made a representation to
the Govt to grant land to set up a University – Necessary steps were
taken by the Govt for allotment of land – However, the Law
Department opined that the land can be acquired only for a Public D
Company under the 1894 Act – Pursuant to which, appellant
company passed resolution to change the status from Private
Company to Public Company and intimated the same to Govt. –
Thereafter, Land Acquisition notifications u/s 4(1) of the Act were
issued for 6917.63 acres – Writ Petition was filed in the High Court E
challenging the entire acquisition proceedings – Division Bench of
High Court allowed the Petition and held that the entire proceeding
was in flagrant violation of the statutory provisions of the Act –
High Court quashed the acquisition proceedings by observing that
the public interest was affected and there was violation of rule of
law – On appeal, held: Initiation of the acquisition proceedings F
was by the Vedanta Foundation and thereafter by the Anil Agarwal
Foundation, which admittedly at the relevant time and as on
19.07.2006 was a private company – It was the case of appellant
that it successfully converted into the public company on 23.11.2006
and it increased number of members from 3 to 7 and in terms of G
Section 44 of the Companies Act, 1956, it amended its Articles of
Association to delete the restriction on free transferability of the
shares and the same has been acknowledged by the Registrar of
Companies (ROC) by acknowledgment dated 21.02.2007 and
03.03.2011 – However, even the subsequent acknowledgment by
H
969
970 SUPREME COURT REPORTS [2023] 8 S.C.R.
A the Registrar of Companies on 21.02.2007 and 03.03.2011 was
much after s.4(1) notification which were issued between 13.12.2006
to 21.08.2007 – Therefore, legally, the appellant was not converted
to public company at the relevant time – At the relevant time, when
the company was a private company, in view of the bar under s.44-
B B of the 1894 Act, the lands in question could not have been sought
to be acquired by the appellant company – Subsequent conversion
from private company to public company was an attempt to get out
of the statutory provision under the Act, 1894, which is mala fide
exercise on the part of the appellants – Even there was non-
compliance of mandatory provisions under rr.3 and 4 of the Rules,
C 1963 and therefore, the entire acquisition proceedings for the
beneficiary company was vitiated – There was also non-application
of mind by the State Government on environmental aspects and
passing of two rivers from the acquired lands in question – How the
maintenance of the rivers etc. can be handed over to the beneficiary
D company – If the lands in question are continued to be acquired by
the beneficiary company, the control of the rivers would be with the
said private company, which would violate the Doctrine of Public
Trust – Further, there is a Wildlife Sanctuary, just adjacent across
the road to the proposed university and the lands acquired –
Therefore, large-scale construction for establishment of the proposed
E
university as observed by the High Court will also adversely affect
the Wildlife Sanctuary, entire Eco system and the ecological
environment in the locality – Even otherwise, there is non-application
on part of the State Government on the requirement of the lands by
the beneficiary company – From the material on record, it appears
F that undue benefits were proposed / in fact offered and given to the
beneficiary company providing undue largesse – It is not appreciable
why the Government offered such an undue favour to one trust/
company – Thus, the entire acquisition proceedings and the benefits,
proposed by the State Government were vitiated by favourism and
G violative of Art.14 of the Constitution – High Court was justified in
setting aside the entire acquisition proceedings, which was vitiated
by non-compliance of the statutory provisions under the Act, 1894
and the Rules, 1963 and also vitiated by mala fides and favourism
and is a clear case of the non-application of mind on relevant aspects
– Constitution of India – Art. 14.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 971
ORISSA AND ORS.
Dismissing the appeals, the Court A
HELD: 1. The initiation of the acquisition proceedings was
by the Vedanta Foundation and thereafter by the Anil Agarwal
Foundation, which admittedly at the relevant time and as on
19.07.2006 was a private company having three Directors on its
Board and less than seven members. The initiation of the B
proceedings to acquire the identified lands, identified by the
appellant company was in the month of April/June, 2006, which
was followed by the MoU dated 19.07.2006. Therefore, the
relevant date for consideration would be 19.07.2006 and not
13.12.2006 as sought to be contended on behalf of the appellants.
[Para 8.5][1014-F-G, H; 1015-A] C
1.2 At this stage, it is required to be noted that even
otherwise the subsequent alleged conversion from private
company to public company was an attempt to get out of the
statutory provision under the Act, 1894. The Law Department
specifically observed that the land cannot be acquired by private D
company for the purposes for which the lands were sought to be
acquired, only thereafter the appellants changed the status of
the company from private company to public company. The
aforesaid was a mala fide exercise on the part of the appellants.
[Para 8.6][1015-B-C]
E
1.3 It is the case on behalf of the appellant that the appellant
successfully converted into the public company on 23.11.2006
and it increased number of members from 3 to 7 and in terms of
Section 44 of the Companies Act, 1956, it amended its Articles of
Association to delete the restriction on free transferability of the
shares and the same has been acknowledged by the Registrar of F
Companies (ROC) by acknowledgment dated 21.02.2007 and
03.03.2011 is concerned, it is required to be noted and as
observed hereinabove the relevant date for consideration would
be June, 2006 and in any case 19.07.2006 when the MoU was
entered into. Even the subsequent acknowledgment by the ROC
G
was on 21.02.2007 and 03.03.2011 even much after Section 4(1)
notification. Therefore, as rightly observed and held by the High
Court legally, the appellant was not converted to public company,
which as such was a Section 25 company and therefore, not a
public company. [Para 8.7][1015-D-G]
H
972 SUPREME COURT REPORTS [2023] 8 S.C.R.
A 2. From the material on record, the High Court has given
the specific findings that there is a non-compliance of mandatory
provisions under Rules 3 and 4 of the Rules, 1963 and therefore,
the entire acquisition proceedings for the beneficiary company
has been vitiated and there are checks and balances and certain
mandatory procedures and requirements are to be satisfied, more
B
particularly, when the lands are to be acquired for the company,
the same have to be adhered to and non-consideration of the
relevant aspects, which are mandatory to be considered under
Rule 4 would vitiate the entire acquisition proceedings as the
subjective satisfaction by the State Government has been vitiated
C on non-consideration of the relevant aspects, more particularly,
the aspects mentioned in Rule 4. [Para 8.15][1021-C-D]
3. The most important aspect, which is required to be
considered is the non-application of mind by the State Government
on environmental aspects and passing of two rivers from the
D acquired lands in question. It is not in dispute that from the lands
in question two rivers namely ‘Nuanai’ and ‘Nala’ are flowing,
which as such were acquired by the State Government. How the
maintenance of the rivers etc. can be handed over to the
beneficiary company. If the lands in question are continued to be
acquired by the beneficiary company, the control of the rivers
E would be with the said private company, which would violate the
Doctrine of Public Trust. Even requiring the beneficiary company
to maintain the flow of above two rivers may also affect the
residents of the locality at large. It is also required to be noted
that just across the road, there is a Wildlife Sanctuary, which is
F just adjacent across the road to the proposed university and the
lands acquired. Therefore, the large-scale construction for the
establishment of the proposed university as observed by the High
Court will also adversely affect the Wildlife Sanctuary, entire Eco
system and the ecological environment in the locality. It is a duty
of the State to protect the Wildlife Sanctuary and it may affect the
G entire Eco system and the ecological environment in the locality.
It is also required to be noted that even the distance of the sea
from the proposed Vedanta University is approximately 2000
meters. Merely because the Balukhand Wildlife Sanctuary is
separated from the proposed site by a highway – Puri-Konark
Marine Drive, cannot be a ground to acquire the huge lands for
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 973
ORISSA AND ORS.
the proposed university and as rightly observed by the High A
Court, the same will adversely affect the Wildlife Sanctuary and
the entire Eco system and the ecological environment in the
locality. The aforesaid aspects has not at all been considered by
the State Government and/or the Collector and/or the appropriate
authority even while considering the proposal and/or even the
objections under Section 5A of the Act, 1894. [Para 8.17 & B
8.18][1022-F-H; 1023-A-D]
4. Even otherwise, there is a non-application on the part of
the State Government on the requirement of the lands by the
beneficiary company. The lands were proposed to be acquired at
the instance of one foundation / company and the State C
Government was dealing with the lands belonging to the
agricultural landowners. The Government is holding a public trust
and has to deal with the lands belonging to private landowners,
more particularly, agricultural landowners in accordance with law.
The State Government could not have considered the proposal
from only one beneficiary/trust. There may be other public trusts D
/ companies, who might be interested in establishing such
university. Even no proper inquiry seems to have been initiated
by the Government / Collector while considering the proposal by
the beneficiary company. It is required to be noted that initially,
15,000 acres of the agricultural lands was sought to be acquired E
for the proposed university. Ultimately, approximately, 8000 acres
of the land belonging to the private landowners / agricultural
landowners came to be acquired. The State Government has also
handed over the possession of approximately 495 acres of land
belonging to the State Government including the Gochar Lands
etc., which could have been used for the other public purpose F
and even for the Gochar Lands also. It is not appreciable why the
Government offered such an undue favour in favour of one trust/
company. Thus, the entire acquisition proceedings and the
benefits, which were proposed by the State Government were
vitiated by favourism and violative of Article 14 of the Constitution
of India. [Para 8.19 & 8.21][1023-E-H; 1024-A, G-H] G
Delhi Administration vs. Gurdip Singh Uban and Ors.,
(2000) 7 SCC 296: [2000] 2 Suppl. SCR 496; V.
Chandrasekaran and Anr. vs. Administrative Officer and
Ors., (2012) 12 SCC 133: [2012] 10 SCR 603; S.P.
Gupta vs. Union of India, 1981 Supp SCC 87: [1982] H
974 SUPREME COURT REPORTS [2023] 8 S.C.R.
A SCR 365; Bandhua Mukti Morcha Vs. Union of India,
(1984) 3 SCC 161: [1984] 2 SCR 67; Public Union for
Civil Liberties vs. State of T.N., (2013) 1 SCC 585:
[2012] 9 SCR 579; Devinder Singh vs. State of Punjab,
(2008) 1 SCC 728: [2007] 11 SCR 475; City
Montessori School vs. State of U.P., (2009) 14 SCC
B 253: [2009] 2 SCR 630 and Common Cause, A
Registered Society vs. Union of India and Ors. (1999)
6 SCC 667: [1999] 3 SCR 1279 – referred to.
Case Law Reference
[2000] 2 Suppl. SCR 496 referred to Para 4.5
C
[2012] 10 SCR 603 referred to Para 4.6
[1982] SCR 365 referred to Para 5.9
[1984] 2 SCR 67 referred to Para 5.9
[2012] 9 SCR 579 referred to Para 5.9
D [2007] 11 SCR 475 referred to Para 5.24
[2009] 2 SCR 630 referred to Para 5.24
[1999] 3 SCR 1279 referred to Para 5.26
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.1144-
1146 of 2011.
E From the Judgment and Order dated 16.11.2010 of the High Court
of Orissa at Cuttack in WP Nos.6863 of 2009, 10325 and 12948 of 2008.
With
Civil Appeal Nos.1148-1150, 1152-1154 And 1161-1169 of 2011.
N. Venkataraman, Sanjay Jain, ASGs, C. Aryama Sundaram,
F Prashanto Sen, Rakesh Dwivedi, Sanjay Parikh, Sr. Advs., Dhananjaya
Mishra, P. S. Sudheer, Ms. Abhisree Saujanya, Navneet Dogra, Bharat
Sood, Ms. Shruti Jose, Aryan Rai, Milind Kumar, Vishal Meghwal, Arya
Tripathy, Prashant Bhushan, Pranav Sachdeva, Chinmaya Mishra, Ajit
Pudussery, Satvik Parikh, V.C. Bharathi, Ms. Priyanka Das, Rajat Nair,
H.R. Rao, Arvind Kumar Sharma, Rupesh Kumar, Ms. Nisha Bagchi,
G
Anukalp Jain, Raghav Sharma, Ms. Swarupama Chaturvedi, Udai
Khanna, Rutwik Panda, Ms. Nikhar Berry, Ms. Anshu Malik, Abhisth
Kumar, Raj Kumar Mehta, Aman Jha, Ms. Babita Yadav, Raman Yadav,
Ms. Shubha Yadav, Gaurav Prakash Shah, Rishi Tutu, Ms. Akansha,
Manoj Rajput, Ms. Ruchi Kohli, Shibashish Misra, Chandan Kumar
H Mandal, Advs. for the appearing parties.
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 975
ORISSA AND ORS.
The Judgment of the Court was delivered by A
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the High Court of Orissa dated 16.11.2010
passed in Writ Petition Nos. 10325 of 2008, 12948 of 2008 and 6863 of
2009 by which the Division Bench of the High Court has allowed the B
said writ petitions and has quashed the land acquisition proceedings in
question including the notifications under Section 4(1) and 6 of the Land
Acquisition Act, 1894 (hereinafter referred to as “Act, 1894”) and the
awards passed in the land acquisition proceedings for acquisition of lands
in favour of the appellant – beneficiary company and directed that the C
possession of the acquired lands shall be restored to the respective
landowners and on restoration of the possession to the landowners, they
shall refund the amounts received by them as compensation or otherwise
in respect of their lands. By the impugned common judgment and order,
the High Court has also quashed the grant of Government Land in favour
of the beneficiary company under Rule 5 of the Government Land D
Settlement Rules with a direction to the State Government to resume
the lands which were granted to the beneficiary company by way of
lease, the appellant – the beneficiary company and others have preferred
the present appeals.
2. At the outset, it is required to be noted that before the High E
Court, two writ petitions were filed by the original landowners whose
lands have been acquired and one writ petition was filed by way of
public interest litigation on behalf of the small landholders, who could not
approach the Court and also on behalf of the people of the locality.
2.1 It is required to be noted that the dispute is with respect to the F
acquisition of about 6000 acres of land belonging to about 6000 families,
affecting approximately 30,000 people.
3. The facts leading to the present appeals in nutshell are as under:-
3.1 That on 23.06.2006, one Mohit Kumar Rana, Principal, A.T.
G
Kearney Limited submitted an application before the State Government
stating that M/s. Vedanta Resources Limited is contemplating to set up
a University in Orissa to impart education in under-graduate and post-
graduate courses in Engineering, Medicine, Management, General
Science and Humanities etc. It was further stated in the application that
the Group had given a presentation to the Hon’ble Chief Minister of H
976 SUPREME COURT REPORTS [2023] 8 S.C.R.
A Orissa during April, 2006. That after visiting different sites in Orissa,
their team have selected a site on the outskirt of Puri on the Puri-Konark
marine drive to be the place ideal for establishment of the University.
Therefore, it was, inter alia, prayed that the Government of Orissa should
make available 15,000 acres of contiguous land around Nuanai, in the
district of Puri in Bhubneswar-Puri-Konark marine drive. It was also
B
prayed that the Government of Orissa should also coordinate the land
acquisition process by appointment of a Special Land Acquisition Officer.
The Group prayed that they require 1500 acres of land for Phase-I to be
acquired by September, 2006 and the balance by December, 2006.
Thereafter, a Memorandum of Understanding was signed between the
C Government of Orissa and Vedanta Foundation on 19.07.2006. The
Government of Orissa confirmed the availability of contiguous land of
about 8000 acres and to make endeavour to provide an additional
contiguous land and other facilities as required by the Foundation.
3.2 That a Private Limited Company incorporated in the name
D and style of Sterlite Foundation changed its name to Vedanta Foundation
under section 25 of the Companies Act, 1956 and accordingly fresh
Certificate of Incorporation consequent on change of the name was
issued in July, 2004. After signing of the MOU, necessary steps were
taken by the State Government for allotment of the land to the Foundation
and the Vice President of the Vedanta Foundation was directed to deposit
E 20% of the estimated investment cost, which was subsequently reduced
to 10% and necessary direction was issued to Collector, Puri to obtain
administrative approval of the project from the Higher Education
Department and to produce the approval along with the proposal before
the Government.
F 3.3 According to the State, in the meantime, the opinion of the
Law Department was sought on the questions:-
(a) Whether the foundation is an education foundation? and
(b) Whether the land is required to be acquired for public
G purpose?
3.4 Thereafter the correspondences took place between the Law
Department and the Revenue and Disaster Management Department.
The Law Department observed that land can be acquired for the
proposed educational scheme under the Act, 1894 if the appropriate
Department of the Government sponsors a Scheme to carry out that.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 977
ORISSA AND ORS. [M. R. SHAH, J.]
Alternatively, the land can be acquired for an educational scheme A
sponsored by a Society but with the prior approval of the Government.
So observing, the Law Department opined that under the Act, 1894, land
can be acquired for public purpose provided Government sponsors to
carry out an educational scheme or by a registered society with prior
approval of the Government. Alternatively, it also opined that the
B
Administrative Department may verify if acquisition of land can be made
under section 15 of the Orissa Industrial Infrastructural Development
Corporation Act, 1980. After the aforesaid opinion was received, the
Administrative Department was of the view that the second option to go
through IDCO was not feasible and suggested to consider as to whether
the Higher Education Department will sponsor and own the project directly C
and whether it would be done through a Society to be framed by the
Higher Education Department.
3.5 Thereafter, it was decided to explore the alternative of the
Private Company to be converted into a public company on which, the
views of the Law Department was again sought. The Law Department D
opined that the land can be acquired for a ‘Public Company’ under the
Act, 1894 in accordance with Part VII. That Vedanta Foundation again
changed its name to Anil Agarwal Foundation. On account of the name
change, a fresh Certificate of Incorporation was obtained from the
Registrar of Companies under Section 23(1) of the Companies Act on
06.09.2006. E
3.6 In a meeting of the Board of Directors of Anil Agarwal
Foundation held on 16.10.2006, a resolution was passed to change the
status of the company from a private company to a public company. Anil
Agarwal Foundation intimated the Department of Higher Education of
the change of name and structure of Vedanta Foundation on 01.11.2006. F
On 24.11.2006, Anil Agarwal Foundation confirmed to the Secretary,
Department of Higher Education that the status of the company had
been changed from a private to a public company. The Collector, Puri,
on the same day, i.e., 24.11.2006, intimated the Joint Secretary, Revenue
Department regarding the change of status to a public company and G
also to the Department of Higher Education for revised administrative
approval for acquisition of land for the establishment of Vedanta
University.
3.7 That thereafter notifications under Section 4(1) of the Act,
1894 were issued between 13.12.2006 to 21.08.2007 for 6917.63 acres.
H
978 SUPREME COURT REPORTS [2023] 8 S.C.R.
A The said notifications inter alia indicated that the acquisition was being
conducted in terms of Chapter VII of the Act, 1894. That thereafter a
declaration under Section 6 of the Act, 1894 was issued for 5619.05
acres after seeking the objections under Section 5A of the Act, 1894.
According to the appellant, after the awards were declared, the
possession was delivered in respect of 3342 acres of acquired land and
B
the sponsored 495 acres of Government land and the compensation of
Rs. 41.96 crores was also disbursed.
3.8 As a vast tract of lands belonged to the poor, small farmers
and the land so acquired was at a prestigious location and thousands of
families of farmers were affected by the acquisition of such a vast tract
C of lands and that too in favour of a private company, which was mala
fide subsequently converted to public company, the writ petitions were
filed before the High Court challenging the entire acquisition proceedings
/ process.
3.9 By the impugned judgment and order, the Division Bench of
D the High Court has allowed the writ petitions including the public interest
litigation by holding that :-
(i) the acquisition proceedings from the stage of initiation till the
date of purported awards which in fact and in law not awarded
and that the alleged taking over the possession of the lands is in
E flagrant violation of the statutory provision of Sections 4, 5A, 6, 9,
10, 11, 12, (2), 23, 24, read with the provisions under Part - VII of
the Act, 1894.;
(ii) the initiation of the acquisition proceedings in favour of the
beneficiary company, on the requisition made by the Vedanta
Foundation by misrepresenting fact and playing fraud on the State
F Government, has vitiated the entire acquisition proceedings.;
(iii) that the public interest at large is affected and there is violation
of rule of law.;
(iv) the Public Interest Litigation was maintainable, which was on
behalf of small land holders who have no sustenance to approach
G this Court to fight litigation.;
(v) therefore, the acquisition proceedings in its entirety in respect
of persons who have approached this Court and even who have
not approached this Court are liable be quashed for the reason
that there is flagrant violation of the provisions of the Act, 1894.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 979
ORISSA AND ORS. [M. R. SHAH, J.]
3.10 Thereafter, the High Court has passed the following order in A
terms of paragraph 69, which is as under:-
“69. In the result, we allow the writ petitions, quash the impugned
land acquisition proceedings including the notification under
Sections 4(1) and 6 and the award passed in the Land Acquisition
Proceedings for acquisition of land in favour of the beneficiary B
company and direct that the possession of the acquired lands shall
be resorted to the respective land owners irrespective of the fact
whether they have challenged the acquisition of their lands or not.
On restoration of the possession to the land owners, they shall
refund the amount received by them as compensation or otherwise
in respect of their lands. We also quash the grant of Government C
Land in favour of the Beneficiary Company under Rule 5 of the
Government Land Settlement Rules with a direction to the State
Government to resume the lands which were granted to the
beneficiary company by way of lease. All concerned including
the State Government, the land owners and beneficiary company D
shall implement the aforesaid direction at an early date.”
3.11 The impugned common judgment and order passed by the
High Court and the operative portion of the order in paragraph 69 of
judgment are the subject matter of the present appeals.
4. Shri C. Aryama Sundaram and Shri Rakesh Dwivedi, learned E
senior counsel appearing on behalf of the respective appellants have
vehemently submitted that in the facts and circumstances of the case,
the High Court has materially erred in quashing and setting aside the
entire acquisition proceedings and that too even with respect to the
landowners whose lands came to be acquired, did not challenge the F
acquisition proceedings and/or even many of them did not raise any
objections under Section 5A of the Act, 1894.
4.1 Learned senior counsel appearing on behalf of the respective
appellants have prayed to consider the following facts in support of their
submissions that the impugned judgment and order passed by the High G
Court setting aside the entire acquisition proceedings is not warranted:-
(i) It is submitted that notifications under Section 4 of the Act,
1894 came to be issued between 13.12.2006 to 21.08.2007
for 6917.63 acres;
H
980 SUPREME COURT REPORTS [2023] 8 S.C.R.
A (ii) Declarations under Section 6 of the Act, 1894 were issued
for 5619.05 acres, before that the objections under Section
5A of the Act, 1894 were invited;
(iii) Only 13 landowners, who were the owner of 78.89 acres
submitted their objections; with respect to 3 landowners to
B the extent of 25.61 acres, objections came to be accepted
and 10 objections came to be rejected. None of the 10
rejectees had approached any Court with any grievance.
(iv) That the possession came to be delivered in favour of the
beneficiary in respect of 3342 acres of acquired land.
C (v) Possession was also delivered in respect of 495 acres of
Government land.
(vi) It is submitted that therefore, the possession of total 3837
acres was handed over to the beneficiary.
D (vii) That the beneficiary has already disbursed the compensation
of Rs. 41.96 crores.
(viii) It is submitted that in addition to compensation, ex-gratia
amount of Rs. 25.13 crores was also disbursed.
(ix) It is submitted that, thus, 3837 persons have received the
E compensation as above.
It is submitted that in view of the above facts and circumstances,
the High Court has materially erred in setting aside the entire acquisition
proceedings.
4.2 It is further submitted that there were a total of 9 writ petitioners
F before the High Court. One of them was an objector under Section 5A,
however, his land was dropped from the land acquisition proceedings.
He is, therefore, now only a pro forma party before this Court.
4.2.1 It is submitted that one of the original writ petitioners was a
land loser, but not an objector under Section 5A. His land was also
G dropped from the land acquisition proceedings at the stage of Section 6.
4.2.2 Five of the original writ petitioners are land losers, but not
objectors under Section 5A.
4.2.3 Two of the writ petitioners are PIL petitioners.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 981
ORISSA AND ORS. [M. R. SHAH, J.]
4.3 It is submitted that therefore, as on today, there are a total of A
7 land losers before this Court, who hold approximately 11.52 acres,
however, none of them filed objection under Section 5A. Learned senior
counsel appearing on behalf of the beneficiary has stated at the Bar that
the appellant is now willing to exclude their land from the acquisition
proceedings, even though they did not file Section 5A objection.
B
4.4 It is further submitted that in fact so far as the PILs before
the High Court are concerned, the same ought not to have been entertained
by the High Court in view of the earlier dismissal of PIL being Writ
Petition (C) No. 6981 of 2008 which was filed by the PIL writ petitioner.
4.5 It is further submitted by the learned senior counsel appearing C
on behalf of the appellants that as observed hereinabove except few,
none of the said land losers submitted any objections under Section 5A.
It is submitted that as observed and held by this Court in the case of
Delhi Administration Vs. Gurdip Singh Uban and Ors., (2000) 7
SCC 296, all personal nature objections are deemed to be waived.
D
4.6 Relying upon the decision of this Court in the case of V.
Chandrasekaran and Anr. Vs. Administrative Officer and Ors.,
(2012) 12 SCC 133, it is further submitted that if the acquisition is
challenged by one land loser, other cannot take advantage of it if he has
not filed objection under Section 5A of the Act, 1894.
4.7 It is further submitted by the learned senior counsel appearing E
on behalf of the respective appellants that in the present case the
acquisition proceedings have attained finality, inasmuch as, after the
declaration under Section 6 of the Act, 1894 and after holding inquiry
under Section 11, the awards were declared and most of the landowners
were paid the compensation and even the possession to the extent of F
3342 acres was handed over to the beneficiary. It is submitted that
therefore, when the acquisition has attained finality, awards have been
made, possession taken and compensation disbursed then setting aside
the entire acquisition proceedings is not desirable.
4.8 It is further submitted by the learned senior counsel appearing
G
on behalf of the beneficiary that though initially the lands were sought to
be acquired by a private company, however, thereafter the company
was converted into a public limited company after following due procedure
under the provisions of the Companies Act. He has taken us to the
various correspondences and the orders passed converting the beneficiary
company to public limited company. H
982 SUPREME COURT REPORTS [2023] 8 S.C.R.
A 4.9 Relying upon those documents, it is vehemently submitted that
therefore at the time when the Section 4 notifications were issued, the
beneficiary company was already converted to a public company.
Therefore, the acquisition in favour of the beneficiary company was
absolutely in consonance with the provisions of the Act, 1894. It is further
submitted that the acquisition of the lands in question in favour of the
B
beneficiary trust/ company was after a detailed consultation and taking
into consideration the object and purpose of the trust / company in the
field of education etc. It is submitted that the beneficiary company /
trust wants and/or desirous of establishing a very renowned university in
the State of Orissa.
C 4.10 It is further submitted by the learned senior counsel appearing
on behalf of the beneficiary company that if the impugned judgment and
order passed by the High Court is not interfered with by this Court, there
shall be serious and adverse impact in implementing the appellant’s project.
4.11 It is submitted that the appellant – beneficiary has drawn up
D a Vision Plan for over 3837 acres of land, which is currently in their
possession. It is submitted that the Vision Plan postulates a University
catering to 1,00,000 students and the University would be built in a phased
manner. It is submitted that in Phase I, colleges in the field of Medicine,
Liberal Arts, Science & Technology, Agriculture and Food Processing
E and Institute of Design would be started.
4.12 It is submitted that eminent academicians are already on the
advisory/academic board of the project. It is further submitted that
adequate safeguards have been provided in Section 41 agreement that
the land would be utilized for the University, and in case any portion of
F the land is not utilized for the University purpose, then the said portion
reverts to the State Government.
4.13 It is further submitted by the learned senior counsel appearing
on behalf of the respective appellants that even after the acquisition of
the lands in question, the rehabilitation measures have been taken as per
G the policy of the State Government, which are as under:-
“1. R&R Policy of State Govt. followed whereunder an R&R
Colony of 65.17 acres within the acquired land has been
set apart to accommodate the 230 displaced families. It
may be noted that site of the R&R Colony has been chosen
by the displaced families themselves.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 983
ORISSA AND ORS. [M. R. SHAH, J.]
2. The project affected families are entitled to a preference A
for employment in the University.
3. Appellant has agreed to appoint one graduate from all land
losing families as an employee.
4. Appellant has agreed to engage landless agriculture
labourers as unskilled construction workers. In the event B
the same is not provided, then a subsistence allowance of
Rs. 1500 per month would be paid to each family from date
of possession to 2010.
5. Appellant has agreed to bear the expenditure for students
from land losing families to study at DAV School, Puri.” C
4.14 It is further submitted by the learned senior counsel appearing
on behalf of the appellants that in the present case, there is a compliance
of Part VII of the Act, 1894 and the Land Acquisition (Companies)
Rules, 1963 ( hereinafter referred to as “Rules, 1963”). It is submitted
that in the present case, Part VII has been complied with as under:- D
“1. Part VII has been complied with as:
(i) Section 39/40 consent has been given by the State
Government.
(ii) Enquiry under Section 40(2)/ Rule 4 has been carried out. E
(iii) Agreement has been signed by the Foundation as mandated
under Section 41.
(iv) Section 44B not applicable since the Appellant is a public
company.”
F
4.15 It is further submitted that insofar as Rules, 1963 are
concerned, it is the case on behalf of the appellant that a Rule 4 enquiry
is relevant only in the case when the land is identified by the company
and not by the State Government and thereafter an application is made
by the company to acquire the said identified land. It is submitted that in
the present case, the land was not only identified by the State Government G
(and, therefore, not by the appellant beneficiary), but done so after
substantially undertaking the enquiry as envisaged under Rule 4. In
support of his above submission, Shri C. Aryama Sundaram, learned
senior counsel appearing on behalf of the appellant trust / beneficiary
has prayed to consider the following dates and events:- H
984 SUPREME COURT REPORTS [2023] 8 S.C.R.
A “(i) April 2006- A presentation was made by Vedanta Resources
Ltd. to the Chief Minister of Odisha for setting up of a
University in Orissa. (Note: No Particular land identified
by Vedanta in this presentation)
(ii) April-June, 2006 - It was known to the State Govt. that the
B Vedanta group had made similar representations to few
other States as well. Since the proposal presented a huge
opportunity for the State, it started the process of identifying
suitable locations on its own, under the leadership of its top
officers, i.e. the Chief Secretary, and carried out a detailed
inquiry towards identifying land keeping in mind the
C considerations under Rule 4
(iii) After looking at various options, the State Govt. finally zeroed
in on Puri.
(iv) 16.06.2006- The Office of the Chief Minister of Orissa
D convened a meeting of Secretaries of various departments
in relation to the establishment of the University. At the
meeting, State Govt. made a detailed presentation to the
Appellant on the land identified by it in Puri. In the said
presentation, considerations regarding the suitability of the
land, the extent thereof, the habitation thereunder etc. have
E been considered in detail. [Note: this also shows Compliance
with Rule 4(1)(i) and (iii)]
(v) 23.06.2006 - Pursuant to the aforesaid presentation by the
State, the Appellant made independent visits to the site
proposed in the presentation. On this basis, a letter was
F written to the Office of the Chief Minister by AT Kearney
(a Consultant appointed by Vedanta) stating that Vedanta
was interested in setting up a University in Puri.
(vi) 26.06.2006- as per direction of the State Government, the
Addl. District Magistrate, Puri and the Tahasildar, Puri made
G further visit to the project area.
(vii) During the aforesaid exercise:
a) Addl. District Magistrate, Puri and Secretary, Works
also made aerial survey of the site. [Note: this also
shows Compliance with Rule 4(1)(i)]
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 985
ORISSA AND ORS. [M. R. SHAH, J.]
b) Number of informal group meetings in the village A
between the Collector and other State Govt. officers
before the acquisition proceedings were initiated. This
was done to discuss various aspects of land acquisition
including suitability of land, and to appraise the
villagers of the purpose of land acquisition; [Note:
B
this also shows Compliance with Rule 4(1)(i) and
(iii)]
c) Visits were also made for the purpose of ascertaining
that minimum displacement was taking place out of
the one various alternative locations
C
d) Determination was also done to see that the Appellant
is able to utilize the land, which were frozen,
expeditiously; at various reviews, the requirement of
land was scaled down to 6000 acres; [Note: this also
shows Compliance with Rule 4(1)(iv) and (v)]
D
e) Exercise was also undertaken to find out that the
land is rain fed; not irrigated; not much good quality
of agricultural land; inferior, unproductive and fallow
land. [Note: this also shows Compliance with Rule
4(1)(vi)]
E
f) Most of the land oustees of the project area were
contacted either in meetings by the Appellants to make
negotiations for payment of reasonable price. [Note:
this also shows Compliance with Rule 4(1)(ii)]
(viii) 19.07.2006 - after being satisfied about the direct and indirect F
benefits to be accrued to the state, an MoU was signed to
establish the proposed university. [Note: Compliance with
Rule 4(1)(v)], namely, determination to ensure that the
Appellant is able to utilize the land expeditiously
(ix) 09.08.2006- The State Govt. appointed a Special LAO &
G
special officer for R&R in order to coordinate the land
acquisition process.
(x) 29.11.2006 - the State Government, upon being satisfied,
has accorded Administrative Approval for the project.
H
986 SUPREME COURT REPORTS [2023] 8 S.C.R.
A (xi) Minutes of the 7 Core Committee meetings between
02.09.2006 and 07.02.2008 also record substantial
compliance of Rule 4.”
4.16 It is further submitted that therefore, there is a compliance
with Rules 3(1) and 3(2). It is submitted that even the Rule 4 has been
B complied with subsequently.
4.17 Learned senior counsel appearing on behalf of the State
Government has vehemently submitted that in the present case, there is
a compliance of Sections 4, 5A, 6, 9, 11 and 12 of the Act, 1894. It is
prayed to consider the following dates and events in support of compliance
C of the State Government with the provisions under the Act, 1894, which
are as under:-
“1. Notification under Section 4(1) has been published in the
Official Gazette, and in two daily newspapers circulating in
that locality and the Collector has used public notice of the
substance of Notification u/s.4(1) by way of beating of
D
drums at convenient places in the locality under Sec.4(1)
2. No provision in the Act for serving show cause notice to
the interested persons for inviting objections u/s. 5A. The
same is a requirement in Karnataka because of a State
Amendment to the LA Act, 1894 Unfortunately, the same
E has been applied by the High Court vide the impugned
judgment even though Orissa has no such requirement.
3. 13 objection petitions received from 6 villages for an area
measuring Ac 78.89. The Spl. Land Acquisition Officer has
given notice to the objectors for hearing u/s 5-A. Heard the
F petitioners. Has forwarded the objection petitions to Govt.
in the Revenue Department through the District Collector
together with his report and the record of the proceedings.
In fact, 3 of the 13 objections were allowed (25.61 acres).
None of the 10 rejectees approached any Court with any
grievance.
G
4. State Govt. has given public notice of declaration under
Section 6(2).
5. The Collector has served notices u/s. 9 (1) in the village
and to the interested persons u/s. 9(3) calling upon them to
H file claims to compensation, as evident in the LA records.
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 987
ORISSA AND ORS. [M. R. SHAH, J.]
6. After making enquiry into their respective interests, claims A
to compensation and objections to the area, which the
interested persons have stated pursuant to the notices u/s.
9, the Collector u/s. 11 has passed Award on the true area
of the land, the compensation allowed and the apportionment
of compensation.
B
7. In addition to compensation under the LA Act, 1894, ex-
gratia amount of Rs. 1 lakh per acre subject to a minimum
compensation of Rs. 2 lakh acre was to be paid as approved
by the RPDAC (formed as per the State R&R Policy).
This is in addition to various other benefits to be
provided, which have been enumerated at (I).B of this C
Note at Page 3 above.
8. Collector has given notice of his Award to such interested
persons u/s. 12(2) of the LA Act 1894, as evident in the LA
records.”
D
4.18 It is further submitted by the learned senior counsel appearing
on behalf of the appellants that in fact the project does not fall in any
prohibited area. It is beyond the coastal regulatory zone. The distance of
the sea from the proposed Vedanta University is more than 2000 meters.
The Balukhand Wildlife Sanctuary is separated from the proposed site
by a highway / Puri-Konark Marine Drive. It is submitted that the E
Sanctuary is on the seaward side, whereas the proposed site is on the
landward side.
4.19 It is submitted that there are a number of private institutions
and organizations which are on the same side of the highway as the
proposed university, along with the entire village of Beldala with a large F
population. It is submitted that Nuanai which flows through the proposed
site is not a river as alleged. It is submitted that it comprises of two man-
made channels (Gabakund Cut and Siar Cut). It is submitted that the
land was acquired by the State Government for constructing these
channels. The ownership of these two channels continues to lie with the
Water resources Department of the Government of Orissa. It is submitted G
that in any event, all environmental requirements would be scrutinized
and looked into by the MOEF while granting environmental clearance.
4.20 Learned senior counsel appearing on behalf of the respective
appellants have taken us to the findings by the High Court and their
response, which by and large have been refereed to hereinabove. H
988 SUPREME COURT REPORTS [2023] 8 S.C.R.
A 4.21 Making above submissions, it is prayed to allow the present
appeals.
5. Present appeals are vehemently opposed by Shri Prashant
Bhushan, learned counsel appearing on behalf of the respective
respondents – original writ petitioners.
B 5.1 It is submitted that the instant case involves acquisition of
about 6000 acres of land belonging to about 6000 families, and thus,
involving displacement of approximately 30,000 people. It is submitted
that the Government of Orissa has showered huge largesse on the
appellant company by acting in a manifestly arbitrary manner and flouting
C all the mandatory provisions of the Act, 1894 and the Rules, 1963 by
pre-determining the acquisition of the concerned land in favour of the
appellant company. It is submitted that the said illegal action of the
Government of Orissa gives rise to sufficient cause for espousal of public
interest. It is submitted that the action of the State in allotting such a
huge tracts of land admeasuring 6000 acres and that too in the prime
D location, which was nothing but a clear case of favourism and
arbitrariness, which has been rightly set aside by the High Court.
5.2 It is submitted that the land acquisition proceedings including
the notifications under Sections 4(1) and 6 and the awards passed in the
land acquisition proceedings for acquisition of land in favour of the
E beneficiary company have rightly been quashed by the Hon’ble High
Court by the impugned judgment and order, which does not require any
interference of this Court in exercise of the powers under Article 136 of
the Constitution of India.
5.3 It is submitted by the learned counsel appearing on behalf of
F the original writ petitioners – original landowners / land losers that in the
present case the land was identified by the appellant company, and not
by the Government as is evident from the chronology of dates and events
and the Note Sheet of the Principal Secretary of the Chief Minister. It is
submitted that the Note sheet clearly shows, inter alia, that the appellant
G company asked the Government of Orissa to specifically make available
for it 15,000 acres of contiguous land around Nuanai, Puri district in
Bhubaneshwar-Puri-Konark by 15.06.2006.
5.4 It is submitted that even the relevant clauses in the
Memorandum of Understanding (MoU) dated 19.07.2006 also show that
the land was identified by the Company and not by the Government. It is
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 989
ORISSA AND ORS. [M. R. SHAH, J.]
submitted that as per the MoU dated 19.07.2006, it was Vedanta A
Foundation that proposed to set up the university along with a self-
contained township near Puri in Orissa with an estimated cost of Rs.
15,000 crores. It is submitted that in the said MoU also there was a
refence to the proposed location. It is submitted that the Government of
Orissa just confirmed the availability of the contiguous land of about
B
8000 acres. [Clause 5 of the MoU]
5.5 It is submitted that even, the Section 41 agreement executed
between the Government of Orissa and the Anil Aggarwal Foundation
also shows that the land was identified by the company and not by the
Government as the said agreement says that the Company intended to
establish Vedanta University near Puri and had applied to the Government C
of Orissa for the acquisition of the land described in the schedule
thereunder, written and delineated on the map annexed therein whereon
the company intended to establish Vedanta University.
5.6 It is further submitted by the learned counsel appearing on
behalf of the original writ petitioners – original landowners / land losers D
that the Government of Orissa, despite knowing fully well that the Vedanta
Foundation had no prior track record in the field of education, included
several clauses in the MoU dated 19.07.2006, providing undue largesse
to Vedanta like total autonomy to Vedanta University and its authorities
with regard to administration, admission, fee structure, curriculum and E
faculty selection; proposed university to have complete immunity from
any reservation laws of the State Government, all assistance in getting
regulatory approvals from UGC, AICTE etc. It is submitted that even,
as per the said MoU, the Government agreed to provide 4-lane road
from Bhubaneshwar city to the proposed site and the Government of
Orissa shall make the land use/ zoning plan in the 5 km radius from the F
university boundary only after Consultation with Vedanta. It is submitted
that the Government also promised to exempt all state levies/ taxes/
duties namely, viz. VAT, Works Contract Tax, Stamp Duty and Entry tax
on R&D equipment, educational aids, lab equipment and tools, and
construction materials from the date of signing of the MoU. It is submitted G
that the Government also promised to assist the Foundation in obtaining
NOC from SPCB and all clearances from the Central Government. It is
submitted that the Government also promised to assist the Foundation in
arranging rapid EIA and EMP for the project. It is submitted that the
Government also promised to provide extraordinary huge amounts of
H
990 SUPREME COURT REPORTS [2023] 8 S.C.R.
A electricity and water. It is submitted that the aforesaid role of the
Government shows clear favourism in favour of a private trust / company
– Vedanta Foundation.
5.7 It is submitted that the Government of Orissa didn’t apply its
mind regarding the genuineness of the appellant company’s demand of
B 10.000 acres for building the campus. It is submitted that it is to be noted
that one of the largest universities in the world - Stanford University has
lesser contiguous area of around 8,100 acres. It is submitted that in the
present case, the Government of Orissa confirmed the availability of
8000 acres and promised to provide additional contiguous land as required
by the appellant Company. It is submitted that at the relevant time, the
C Foundation was a private company with 3 members of a family and
limited by guarantee of Rs. 5,000/-, and no prior track record in education
sector. It is submitted that while accepting the request by the Vedanta
Foundation, the Government did not consider the prior track record and
did not consider why the Vedanta group has been repeatedly indicted by
D various Governments / authorities / courts/tribunals and agencies for
severe violations of mining laws, environmental laws, causing pollution,
and violation of human rights in its mining projects in Orissa, Tamil Nadu,
Goa and Karnataka.
5.8 Taking us to the observations made by the High court made in
E paras 63 to 67 of the impugned judgment, it is submitted that the High
Court has given cogent reasons and findings to hold that the land
acquisition proceedings were carried out by the Government in a manifestly
arbitrary manner and had defeated the public interest. It is submitted
that therefore, the High Court has rightly entertained the Public Interest
Litigations holding that the initiation of the acquisition proceedings in
F favour of the beneficiary company, on the requisition made by the Vedanta
Foundation by misrepresentation of facts and by playing fraud on the
State Government, which has vitiated the entire acquisition proceedings.
It is submitted that the High Court has rightly observed and held that the
public interest at large is affected and there is violation of rule of law.
G 5.9 Insofar as the submission on behalf of the appellant that only
7 people filed section 5A objections out of approximately 6000 people,
who were losing their lands is concerned, it is submitted that the fact
that only 7 people filed their objections itself shows that the landowners
were either unaware of the land acquisition proceedings and/or were
H too weak, poor and disadvantaged and not in a position to even file
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 991
ORISSA AND ORS. [M. R. SHAH, J.]
objections with the Collector. Relying upon the decisions of this Court in A
the case of S.P. Gupta Vs. Union of India, 1981 Supp SCC 87;
Bandhua Mukti Morcha Vs. Union of India, (1984) 3 SCC 161
and Public Union for Civil Liberties Vs. State of T.N., (2013) 1
SCC 585, it is submitted that the High Court has rightly entertained the
Public Interest Litigation petitions and has rightly quashed the entire
B
acquisition proceedings. It is submitted that the High Court has rightly
entertained and allowed the Public Interest Litigation petitions as by the
acquisition of such a huge tract of land to the extent of 6000 acres,
affecting 30,000 people, who were too weak, poor and disadvantaged,
who could not approach the court for legal redress.
5.10 It is submitted that apart from Public Interest Litigations, the C
land losers had also challenged the acquisition. It is submitted that in the
present case, the High Court has rightly quashed the entire acquisition
proceedings. It has been found that the Hon’ble Courts in various cases
have repeatedly quashed entire acquisitions where illegalities go to the
root of the matter. It is further submitted that even as rightly observed D
and held by the High Court, the entire acquisition proceedings were
suffering from arbitrariness and in Violation of the Act, 1894 and the
statutory Rules in the land acquisition process.
5.11 It is submitted that the appellant is a private company, and
not a public company. It is submitted that admittedly, the appellant claims E
that it was a private company registered under Section 25 limited by
guarantee with a license issued by Central Government. However,
according to the said license itself, any change to Articles of Association
is required to be approved by the Central Government. It is submitted
that herein, the resolution, dated 23.11.2006, altering the Articles of
Association by the appellant to convert it into a public company and F
increasing the members to 7 was not approved by the Central
Government as per the License issued to it under Section 25 and hence,
the company never became a public company. It is submitted that the
aforesaid is evident even from the affidavit filed on behalf of the Registrar
of Companies filed before the High Court. He has taken us to the relevant G
paragraphs namely paragraph Nos. 9, 10 and 12 of the affidavit filed by
the Registrar of Companies dated 15.10.2008 filed before the High Court.
It is further submitted that the reliance of Vedanta on the letter dated
22.11.2006 from the Ministry of Company Affairs is not any evidence of
the company becoming a public company. It is submitted that it merely
H
992 SUPREME COURT REPORTS [2023] 8 S.C.R.
A says that Vedanta’s “request for permission under Section 25(8) of the
Companies Act 1956 is hereby considered of conversion of the status of
the Company from Private to a Public Company”. It is submitted that
the same was subject to compliance of the provisions of Sections 23, 31,
189(2) and 192 of the Companies Act, 1956, which are not complied
with at all.
B
5.12 It is submitted that that is why Articles of Association have
not been produced before the Core committee of the Government without
which no one could understand the nature of the company. It is submitted
that the nature of company, i.e., whether it is public or private depends
upon the nature of holding of shares. It is submitted that if the members
C hold the shares jointly, then as per the proviso to Section 3(c) of the Act,
1956, they shall be treated only as a single member. Further, Section
12(5) of Act, 1956 as to the accountability of its members could not be
ascertained even for Section 25 registered company. Accordingly, the
members, as can be seen from Board Meeting minutes, all the Agarwals
D seem to hold the company jointly, and therefore, it could only be a private
company.
5.13 It is submitted that, however, in appellant’s letter dated
10.02.2011, the appellant admitted that they don’t have any shares and
is a company registered on guarantee under Section 25 of the Act, 1956.
E It is submitted that when there being no shares, the pattern of holding
the shares jointly or severally cannot be ascertained and hence the
company could only be a private company.
5.14 It is submitted that even in the agreement executed on
31.07.2007, the appellant company mentions itself only as a company
F but do not state itself to be a public company. It is submitted that even
the appellant failed to file prospectus or statement in lieu of the same in
Schedule IV as mandated under Section 44 of the Act, 1956. It is submitted
that Schedule IV warrants disclosure of interest of each director in the
company and share holding pattern, without which it is not possible to
ascertain the nature of company. It is submitted that as public company
G is any company other than a private company, share holding pattern is a
must to examine the compliance of proviso to Section 3(c) of 1956 Act.
5.15 It is submitted that a public company shall, in the context of
Act, 1894, require provision in the Articles of Association enabling any
public to purchase shares to remove the basis of private company. It is
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 993
ORISSA AND ORS. [M. R. SHAH, J.]
submitted that the scope of Section 44B should be understood on its A
intention. A company constituted by three family members cannot be
legally accepted as a public company if its members are increased to 7
numbers by adding sons and daughters. It is submitted that therefore,
the phrase “public company” should be construed by taking into
consideration the scope and purport of Section 44B of the Act, 1894. It
B
is submitted that that is why an enquiry is contemplated under Section
40 and the Rules framed therefor.
5.16 It is further submitted that even Clause 13 of the Section 41
Agreement mandates not to pay more than 2/3rd, i.e., 66.66% of the
compensation worked out which is in blatant violation of Section 17(3A)
(3) which mandates to pay 80% of the compensation. It is submitted C
that even for public purpose, the Act mandates to pay 80% before entering
/ taking possession, but for private company, the aforesaid Agreement
mandates not to pay more than 66.67% which is impermissible.
5.17 It is submitted that even Section 41 Agreement was executed
on false premise as no such enquiry as mandated under Section 40 of D
the Act, 1894 r/w Rules, 1963 was conducted. It is submitted that therefore
Section 41 Agreement was a fraudulent exercise of power to give undue
favour to the appellant.
5.18 It is further submitted that even otherwise, admittedly, at the
time of execution of MoU with the Appellant on 19.07.2006, the appellant E
was a private company and hence, the proposal ought not to have been
entertained at all but should have been rejected outrightly. It is submitted
that however, the Government showed undue interest and the entire
Government Machinery worked hastily and acquired the lands using
emergency provision, i.e., Section 17 of the Act. It is submitted that F
even on 30.07.2007, the company was not a public company. Therefore,
entering into MoU/ Agreement with the appellant, a private company,
which formed the basis for land acquisition is violative of the statutory
bar under Sections 40(1)(aa) and 40(1)(b) and 44-B and hence, void ab
initio.
G
5.19 It is further submitted that the appellant’s reliance on
Collector’s letter, dated 25.07.2008, which was after the Section 6
notification, is untenable. It is submitted that the inquiry and report of the
Collector had to proceed before the Section 6 notification. It is further
submitted that even no inquiry was conducted under the Rules, 1963,
H
994 SUPREME COURT REPORTS [2023] 8 S.C.R.
A which has been established and proved from the response by the Special
Land Acquisition Officer to the RTI query dated 27.05.2008. It is
submitted that in response to the said RTI query, the Special Land
Acquisition Officer has responded that; “There was no such inquiry
under Land Acquisition (Companies) Rules, 1963”.
B 5.20 It is further submitted that even in the present case, no
Committee / Core Committee was constituted by the State Government
from among the persons notified under sub-rule (2) of Rule 3 and clauses
(i) and (ii) of the Rules.
5.21 It is submitted that in the present case, the ‘Core Committee’
C constituted by the Department of Higher Education, Government of
Orissa vide the notification dated 17.08.2007, was setup for the expressly
stated purpose of “coordinating activities relating to lease of Government
land and acquisition of private land, facilitating rehabilitation of displaced
families as per policy, expediting accreditation from relevant statutory
bodies as UGC AICTE, MCI, BCI etc. enactment of an Act for the
D University, facilitating issues of no objection certificate from State
Pollution Control Board and other bodies and expediting provision of
road, water, electricity and telephone connectivity required for the
University, etc.” It is submitted that the scope, composition and purpose
for establishment of the aforesaid Core Committee is completely different
E from the scope. composition and purpose of the Land Acquisition
Committee envisaged under Rule 3 of the Rules, 1963. This is because
while the Land Acquisition Committee is required to be established for
assisting the government in evaluating the feasibility and desirability of
the proposal from a company for land acquisition, the Core Committee
was set out with the objective of facilitating the land acquisition process
F with the Government of Orissa having already pre- determined the
feasibility and desirability of the acquisition in clear contravention of the
statutory provisions.
5.22 It is submitted that the appellant’s argument that enquiry
under Rule 4 of the Rules, 1963 was not required / relevant in the present
G case as the land was identified by the Government and not by the
company, does not hold water. It is submitted that in the present case,
the land had clearly been identified by the appellant company since the
very inception. It is submitted that even otherwise, whether the land is
identified by the company or the Government, the statutory Rule 4 cannot
H be dispensed with at all and the collector is bound to inquire into all the
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 995
ORISSA AND ORS. [M. R. SHAH, J.]
things mentioned in Rule 4 of the Rules, 1963, otherwise the whole purpose A
of the Rules, 1963 and Part VII of the Act, 1894 will be defeated. It is
further submitted that even the declarations under Section 6 of the Act,
1894, for most of the villages were made prior to the agreement under
Section 41 of the Act was executed. It is submitted that the same is in
complete contravention and breach of Rule 4 (4)(ii) of the Rules, 1963,
B
which provides that no declaration shall be made by the appropriate
Government under Section 6 of the Act unless the agreement under
section 41 of the Act has been executed by the company. It is submitted
that even the same is also in clear violation of Section 39 of the Act,
1894 which stipulates that the provisions of Sections 6 of the Act, 1894
shall not be put in force in order to acquire the land for any company C
unless the Company has executed the agreement under Section 41 of
the Act, 1894. It is submitted that therefore, as rightly observed and held
by the High Court that the entire land acquisition proceedings is void and
hence all consequential proceedings were also void ab initio.
5.23 It is further submitted by the learned counsel that in the present D
case, right from the very beginning and from the time of signing of the
MoU, the Government of Orissa had made its mind that the land will be
available to Vedanta even though the mandatory requirements of Act,
1894 and the Rules, 1963 were yet to be complied with, which might
have led to the possible failure of the acquisition as the enquiries provided
therein are meant to exclude acquisition of lands if certain mandatory E
requirements are not met with.
5.24 Shri Prashant Bhushan, learned counsel has heavily relied
upon the decisions of this Court in the case of Devinder Singh Vs.
State of Punjab, (2008) 1 SCC 728 and City Montessori School
Vs. State of U.P., (2009) 14 SCC 253 in support of his submission F
that as observed and held by this Court Part VII of the Act, 1894 and the
Rules, 1963 require strict compliance. It is submitted that in the present
case, all the procedures and the requirements of Part VII of the Act,
1894 and the relevant Rules, 1963 are not complied with.
5.25 It is further submitted by Shri Prashant Bhushan, learned G
counsel that in the present case, the inquiry and the objection under
Section 5A of the Act, 1894 have not been properly complied with and/
or adhered to. It is submitted that it was absolutely critical for the Collector
to have properly heard the objections from the affected people in
accordance with Section 5A in relation to desirability of the proposed H
996 SUPREME COURT REPORTS [2023] 8 S.C.R.
A project, irrespective of the number of objections received and should
have made a report in accordance thereof. It is submitted that in the
present case, the said procedure has not been followed by the Collector.
5.26 It is further submitted that even otherwise the impugned land
acquisition is in violation of environmental norms. It is submitted that the
B acquisition of the lands in question in favour of the beneficiary company,
is bad in law in view of the fact that by Gazette Notification dated
23.04.1984 published by the State Government, the nearby area of the
acquired lands has been declared as Wildlife Sanctuary and two rivers,
namely, “Nuanai’&’Nala’ are flowing in the acquired lands according to
the satellite map issued by the Forest Department. It is submitted that
C the control of the said rivers will be under the said private company if
the acquisition proceedings are held to be valid in law thereby the doctrine
of public trust as held by this Court will be violated. It is submitted that in
the case of Common Cause, A Registered Society, (1999) 6 SCC
667, this Court held that natural resources such as air, water, forest,
D lakes, rivers and wildlife are public properties entrusted to the Government
for their safe and proper use and proper protection and the doctrine
enjoins upon the Government to protect the resources for the enjoyment
of the general public rather than to permit their use for private ownership
or commercial purposes. It is submitted that even vast tract of lands
belonging to the State Government including Gochar lands, on the basis
E of requisition made for Vedanta Company, had been de-reserved and
divested from the purpose for which it was reserved and had been made
available for grant in favour of the beneficiary company by way of lease.
It is submitted that even the proper procedure has not been followed for
grant of lease.
F 5.27 It is further submitted that even the subsequent conversion
of a private company to public company was mala fide action/act. It is
submitted that the entire exercise was hurriedly done to convert the
appellant company from private to purportedly public company after it
was already decided to acquire land for it and after the Law department
G during acquisition proceedings observed and opined that the land may be
acquired only for a public company and thereby hurriedly the Articles of
Association and Memorandum of Association were changed in violation
of the conditions of the license granted to the appellant company and
without first informing the concerned authority of the change, which
shows that the exercise was expressly taken up to defeat the object of
H Part VII of Act, 1894. It is further submitted that currently the possession
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 997
ORISSA AND ORS. [M. R. SHAH, J.]
of land is still with the landowners and most of whom are agriculturists A
and their agricultural lands acquired are the only source of livelihood. It
is submitted that in the present case, as submitted hereinabove,
approximately 6000 families and 30,000 people are likely to be affected,
if the land is taken away, then it will cause them great hardship which
can never be compensated in monetary terms.
B
5.28 Making above submissions, it is prayed to dismiss the present
appeals.
6. Having heard the learned counsel for the respective parties
and on going through the impugned judgment and order passed by the
High Court, it appears that while quashing and setting aside the entire C
land acquisition proceedings, the High Court had in fact identified 15
issues, which are as under:-
Issues
Issue No. 1
Whether the Anil Agarwal Foundation, The Beneficiary Company, is a public D
company in terms of the definition under section 3(1)(IV) of the Companies
Act, 1956 and can the private guarantee limited company be converted to
public company under section 25 of the Companies Act?
Issue No. 2
Whether the State Government can acquire the lands in question in favour of
the beneficiary company in exercise of its eminent domain power for the
purpose of establishment of the proposed Vedanta University (not in E
existence) in view of Section 44-B of the Land Acquisition Act, 1894?
Issue No. 3
Whether the State Government on the requisition of Vedanta Foundation
could have initiated the acquisition proceedings in favour of the beneficiary
company by issuing notifications under Section 4(1) of the LA Act without
complying with the mandatory provisions of Section 39, 41 and 42 of the
Land Acquisition Act read with Rules 3(2) and 4 of the Land Acquisition F
(Companies) Rules, 1963?
Issue No. 4
(A) Whether the Collector was required to conduct an inquiry as contemplated
under Section 5-A of the Land Acquisition Act even in the absence of filing
objections to the show cause notice along with preliminary notification
proposing to acquire the lands of the land owners/interested persons in favour
of a beneficiary company? G
and
(B) Whether the Collector was required to submit his report to the State Govt. in
relation to certain matters as referred to under Clause (1) of Rule-4 as it is
mandatory for further action under Section 6 of the LA Act, 1894 in view of
the fact that the acquisition will entail serious civil consequences of the
owners of the lands? H
998 SUPREME COURT REPORTS [2023] 8 S.C.R.
A Issue No. 5
(A) Whether the owners/ interested persons of the land in question have waived
or acquiesced their rights for not filing objections to the preliminary
notifications?
And
(B) Whether there is any delay and latches in these writ petitions and for that
reason they are not entitled to the relief as prayed in these writ petitions?
Issue No. 6 & 7
B
6. Whether the Core Committee appointed by the State Govt. is in compliance
with the provision under Section 40, sub section (2) of the LA Act, 1894 and
it has conducted an inquiry and submitted its report to the State Govt. for its
consideration and compliance of the above provisions of the Act can dispense
with the Rules 3 & 4 of the Land Acquisition (Companies) Rules, 1963 for
declaration under Section 6 of the LA Act?
C
and
7. Whether the State Government has complied with Rules 3(2) and 4 of the
Rules, 1963 and the Collector has submitted his report to the State
Government and the same is forwarded to the Committee constituted for this
purpose and whether it has consulted the Committee before declaring the
lands notified & published under Section 6 notifications?
D
Issue No. 8 & 9
8. Whether the beneficiary company has executed Memorandum of
Understanding as required under Section 41 of the Land Acquisition Act with
the State Government giving undertaking as provided under sub sections (1),
(2) & (3) of the said section of the Act and the same is published in the
E official gazette as required under Section 42 thereof?
And
9. Whether the Memorandum of Understanding dated 19/07/2006 executed by
the beneficiary company can be construed as a valid agreement as provided
under Section 41 of the LA Act for acquiring the lands in question in favour
of the beneficiary company?
F
Issue No. 10
Whether the Collector has determined approx. amount of compensation to be
awarded and deposited as required under the provisions and by following the
procedure as provided under Section 23 and 24 of the LA Act?
Issue no. 11
G Whether awards are passed by the Collector in compliance with Sections 9,
10 and 11 of the LA Act and award notices as required under Section 12 (2)
of the Act are issued and served upon the owners/interested persons and
thereafter possession of the lands has been taken by the State Government
under Section 16 of the LA Act and transferred in favour of the company?
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 999
ORISSA AND ORS. [M. R. SHAH, J.]
Issue No. 12 A
(A) Whether the impugned notifications acquiring the lands in the locality is legal
and valid, as certain lands of them are declared for Wildlife Sanctuary
according to Gazette notification dated 23.4.1984 and two rivers viz.
“Nuanai" and "Nala" are flowing in the lands in question according to
satellite map issued by the Department of Forest, would it affect the ecology
and environment in the locality?
B
And
(B) If so, whether it amounts to violation of provisions of Wildlife (Protection)
Act; Air (Prevention & Control of Pollution) Act as well as Water
(Prevention & Control of Pollution) act, and Environment Protection Act of
1986 and for this reason would it affect either the public interest or public
injury or violation of Rule of Law?
C
Issue Nos. 13, 14 & 15
13. Whether the PIL must succeed if the question Nos. 12(A) & (B) are answered
in favour of the appellants and for violation of any provisions of Land
Acquisition Act as well as Land Acquisition (Companies) Rules, 1963?
And D
14. Whether the acquisition proceedings in its entirety liable to be quashed, if the
petitioners have made out a case, by exercising judicial review power by this
Court? And
15. What relief petitioners are entitled?
7. After elaborate consideration on the aforesaid issues, the High E
court has answered the respective 15 questions as under:-
Issues Findings / Answers given by the
High Court
Issue No. 1 i) As per the details mentioned in
Form No. 32 filed on 19.07.2006,
Whether the Anil Agarwal the Petitioner has only 3 directors
Foundation, The Beneficiary on its board and less than 7
Company, is a public company in members, which is less than what F
terms of the definition under section is required for a public limited
3(1)(IV) of the Companies Act, company under Section 12 (b) of
1956 and can the private guarantee the Companies Act, 1956.
limited company be converted to ii) The Petitioner had tried to change
public company under section 25 of its status from a private to a public
the Companies Act? company but the same was subject
to compliance of Sections 23, 31,
189 (2) and 192 of the Companies
Act, 1956. The Petitioner had not G
furnished certified copy of the
memorandum and articles of
association as required under the
provisions of Section 31 (2A) and
had therefore not acquired the
status of a public company.
iii) The Foundation is a section 25
company, and therefore not a
public limited company. H
1000 SUPREME COURT REPORTS [2023] 8 S.C.R.
A Issue No. 2 i) Acquisition of lands for a private
Whether the State Government can company is not permissible except
acquire the lands in question in for the purpose mentioned in
favour of the beneficiary company Section 40(1)(a) of the Act as
in exercise of its eminent domain stated under Section 44-B of the
power for the purpose of Act. Therefore, the acquisition in
establishment of the proposed question is illegal.
B Vedanta University (not in ii) The University in question is non-
existence) in view of Section 44-B existent as no University has come
of the Land Acquisition Act, 1894? into existence under the University
Grants Commission Act, 1956 or
under the Orissa Universities Act.
iii) The State Government has
promulgated an Ordinance to
C establish an University which is
untenable in law.
Issue No. 3 i) Section 4(1) notification in favour of
Whether the State Government on the beneficiary company were
the requisition of Vedanta made on the basis of a requisition
Foundation could have initiated the filed by Vedanta Foundation, but
acquisition proceedings in favour of not Anil Agarwal Foundation,
D the beneficiary company by issuing which is the beneficiary company.
notifications under Section 4(1) of ii) No enquiry has been made by the
the LA Act without complying with State Government in terms of
the mandatory provisions of Section Rule-4 read with Rule 3 of the
39, 41 and 42 of the Land Land Acquisition (Companies)
Acquisition Act read with Rules Rules, 1963
3(2) and 4 of the Land Acquisition iii) Acquisition of lands by publishing
E (Companies) Rules, 1963? Section 4(1) Notifications in
favour of the beneficiary company
is vitiated in law for the reason
that before putting the provisions
of Section 4 to 16 and 18 to 37 in
order to acquire land no previous
consent of the State Government
F
under Section 39 was there and
such consent shall not be given
unless the company has executed
the agreement under Section 41 of
the Act.
iv) Declaration under Section 6 has
G been made by the State
Government without consulting
the Land Acquisition Committee
to be constituted under Rule- 3 of
the Land Acquisition (Companies)
Rules, 1963.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1001
ORISSA AND ORS. [M. R. SHAH, J.]
Issue No. 4 i) The order sheet of the records A
maintained by Collector discloses
(A) Whether the Collector was required that the Collector has not caused
to conduct an inquiry as public notice, by way of beat of
contemplated under Section 5-A of drums, of the substance of such
the Land Acquisition Act even in notification to be given at
the absence of filing objections to convenient places in the locality.
the show cause notice along with
preliminary notification proposing ii) No notice along with the
to acquire the lands of the land preliminary notification was
owners/interested persons in favour issued and served upon either to B
of a beneficiary company? the owners/ interested persons of
the acquired lands as required in
and law. Therefore, the question of
filling of objections by the land
(B) Whether the Collector was required owners interested persons didn't
to submit his report to the State arise.
Govt. in relation to certain matters
as referred to under Clause (1) of iii) The Collector has not submitted
Rule-4 as it is mandatory for further report under Section 5-A of the C
action under Section 6 of the LA Act or Rule 4 of the Land
Act, 1894 in view of the fact that Acquisition (Companies) Rules,
the acquisition will entail serious 1963.
civil consequences of the owners of
the lands?
Issue No. 5 i) Enquiry under Section 5A is
(A) Whether the owners/ interested mandatory whether or not the land
persons of the land in question have owner makes an objection in
waived or acquiesced their rights writing
for not filing objections to the ii) This point has not been answered D
preliminary notifications? by the Hon'ble High Court.
And
(B) Whether there is any delay and
latches in these writ petitions and
for that reason they are not entitled
to the relief as prayed in these writ
petitions?
Issue No. 6 & 7 Declaration under Section 6 has
been made by the State E
6. Whether the Core Committee Government without consulting
appointed by the State Govt. is in the Land Acquisition Committee
compliance with the provision to be constituted under Rule-3 of
under Section 40, sub section (2) of the Land Acquisition (Companies)
the LA Act, 1894 and it has Rules, 1963.
conducted an inquiry and submitted
its report to the State Govt. for its
consideration and compliance of the
above provisions of the Act can
dispense with the Rules 3 & 4 of the F
Land Acquisition (Companies)
Rules, 1963 for declaration under
Section 6 of the LA Act?
and
7. Whether the State Government has
complied with Rules 3(2) and 4 of
the Rules, 1963 and the Collector G
has submitted his report to the State
Government and the same is
forwarded to the Committee
constituted for this purpose and
whether it has consulted the
Committee before declaring the
lands notified & published under
Section 6 notifications?
H
1002 SUPREME COURT REPORTS [2023] 8 S.C.R.
i) MOU is not in conformity with sub
A Issue No. 8 & 9
sections (1) to (4A) of Section 41.
8. Whether the beneficiary company has ii) There is non-compliance with
executed Memorandum of Section 39 of the Act as there is
Understanding as required under no formal agreement executed
Section 41 of the Land Acquisition under Section 41.
Act with the State Government
giving undertaking as provided
under sub sections (1), (2) & (3) of
the said section of the Act and the
same is published in the official
B gazette as required under Section 42
thereof?
And
9. Whether the Memorandum of
Understanding dated 19/07/2006
executed by the beneficiary
company can be construed as a
valid agreement as provided under
C Section 41 of the LA Act for
acquiring the lands in question in
favour of the beneficiary company?
Issue No. 10 The compensation to be awarded
Whether the Collector has has been determined by the
determined approx. amount of Collector on the basis of sales
compensation to be awarded and statistics secured from District
deposited as required under the Sub Registrar and the value of the
provisions and by following the land has been shown in the sales
D procedure as provided under
Section 23 and 24 of the LA Act?
statistics has been treated as the
market value and awarded the
same as compensation.
Issue no. 11 i) Notices under Sections 9 and 10
Whether awards are passed by the were not issued to the
Collector in compliance with owners/interested persons for fling
Sections 9, 10 and 11 of the LA Act claim statement to award
and award notices as required under compensation is not done.
Section 12 (2) of the Act are issued ii) Award has not been communicated
and served upon the to the land owners as required
owners/interested persons and under Section 12(2) of the LA Act
E thereafter possession of the lands to work out their statutory rights
has been taken by the State as provided under Section 18 of
Government under Section 16 of the the Act.
LA Act and transferred in favour of
the company?
Issue No. 12 i) The satellite maps issued by the
(A) Whether the impugned notifications Department of Forest produced by
acquiring the lands in the locality is the petitioners in the PIL petitions,
legal and valid, as certain lands of clearly shows that two rivers,
them are declared for Wildlife namely, ‘Nuanal’ and ‘Nala’ are
F Sanctuary according to Gazette flowing in certain lands acquired
notification dated 23.4.1984 and in favour of the beneficiary
two rivers viz. “Nuanai" and "Nala" company. Hence, the control of
are flowing in the lands in question the said rivers will be under the
according to satellite map issued by said private company. If the
the Department of Forest, would it acquisition proceedings are held to
affect the ecology and environment be valid in law thereby the
in the locality? doctrine of public trust will be
violated.
And ii) Requiring the beneficiary company
G to maintain the flow of the above
(B) If so, whether it amounts to two rivers would also affect the
violation of provisions of Wildlife residents of the locality at large.
(Protection) Act; Air (Prevention ii) The large scale construction for the
& Control of Pollution) Act as well establishment of the proposed
as Water (Prevention & Control of university will also adversely
Pollution) act, and Environment affect the Wildlife Sanctuary,
Protection Act of 1986 and for this entire Eco system and the
reason would it affect either the ecological environment in the
public interest or public injury or locality.
H violation of Rule of Law?
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1003
ORISSA AND ORS. [M. R. SHAH, J.]
Issue Nos. 13, 14 & 15 i) Acquisition proceedings from the A
13. Whether the PIL must succeed if the stage of initiation till the date of
question Nos. 12(A) & (B) are awards which in fact in law is not
answered in favour of the appellants awarded and the alleged taking
and for violation of any provisions over possession is in violation of
of Land Acquisition Act as well as the Land Acquisition (Companies)
Land Acquisition (Companies) Rules, 1963.
Rules, 1963? ii) On the requisition made by the
beneficiary company by B
And misrepresenting facts and playing
fraud on the State Government,
14. Whether the acquisition proceedings has vitiated the entire land
in its entirety liable to be quashed, if acquisition proceedings.
the petitioners have made out a iii) Apart from public interest the
case, by exercising judicial review petitioners have also pleaded for
power by this Court? And the small land owners of the
marginalised section who have no C
15. What relief petitioners are entitled? access to this Court to fight
litigation.
iv) Therefore, the acquisition
proceedings in its entirety is liable
to be quashed, as per the
judgement of the Supreme Court
in HMT House Building
Cooperative Society Vs. Syed D
Khader & Ors., AIR 1995 SC
2244.
8. We have heard the learned counsel appearing on behalf of the
respective parties at length.
8.1 We have also gone through in detail and considered the E
impugned judgment and order passed by the High Court quashing and
setting aside the entire acquisition proceedings.
8.2 Now, so far as the submission on behalf of the appellants that
the High Court has seriously erred in quashing and setting aside the
entire acquisition proceedings as only few landowners submitted the F
objections under Section 5A of the Act, 1894 and that the High Court
has materially erred in entertaining and allowing the Public Interest
Litigation petitions is concerned, at the outset, it is required to be noted
that in the present case, the State Government has in utter disregard to
the relevant provisions of the Act, 1894 and the Rules, 1963 had acquired
a huge tract of land to the extent of approximately 7000 acres of G
agricultural lands belonging to the various landowners, namely, 6000
families and thus involving displacement of approximately 30,000 people.
It is required to be noted that the lands in question acquired for the
beneficiary foundation / company / trust was acquired for the proposed
university in a prime location just adjacent to the Wildlife Sanctuary and H
1004 SUPREME COURT REPORTS [2023] 8 S.C.R.
A from the lands in question acquired, two small rivers belonging to the
State / acquired by the State are passing. The manner in which the State
Government has dealt with and acquired the agricultural lands belonging
to 6000 families and as it in fact favoured the private limited company,
which was subsequently alleged to have been converted to a public
company and that too without holding any proper inquiry to the need
B
etc., we are of the opinion that the High Court has rightly entertained the
writ petitions including the Public Interest Litigation petitions and merely
because some persons did not file the objections under Section 5A and/
or accepted a meagre compensation and/or even accepted the
compensation cannot be a ground to set aside the acquisition proceedings,
C which as such rightly observed by the High Court, is vitiated by not
following the statutory provisions under the Act, 1894 as well as the
Rules, 1963. It is required to be noted that as such the entire initiation of
land acquisition proceedings and even right from selection of the land
was by the company – beneficiary company and not by the State
Government. There is an utter non-compliance of Rule 4 of the Rules,
D
1963 (which shall be dealt with hereinbelow). Under the circumstances,
it cannot be said that the High Court has committed any error in
entertaining the writ petitions including the Public Interest Litigation
petitions. Cogent reasons have been given by the High Court in paragraphs
63 to 67 while entertaining the public interest litigation petitions and the
E writ petitions, which are as under:-
“63. For the reasons stated supra, definitely the public interest is
involved in these writ petitions filed by the public spirited persons.
It is profitable to know what the apex Court ruled on the point.
In People’s Union for Democratic Rights Vs. Union
F of lndia, (1982) 3 SCC 235, the Supreme Court held as under:
“2 ........ We wish to point out with all the emphasis at
our command that public interest litigation which is a strategic
arm of the legal aid movement and which is intended to bring
justice within the reach of the poor masses, who constitute the
G low visibility area of humanity, is a totally different kind of
litigation from the ordinary traditional litigation which is
essentially of an adversary character where there is a dispute
between two litigating parties, one making claim or seeking
relief against the other and that other opposing such claim or
H resisting such relief. Public interest litigation is brought before
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1005
ORISSA AND ORS. [M. R. SHAH, J.]
the court not for the purpose of enforcing the right of one A
individual against another as happens in the case of ordinary
litigation, but it is intended to promote and vindicate public
interest which demands that violation of constitutional or legal
rights of large number of people who are poor, ignorant or in a
socially or economically disadvantaged position should not go
B
unnoticed and un-redressed. That would be destructive of the
rule of law which forms one of the essential elements of public
interest in any democratic form of Government. The rule of
law does not mean that the protection of the law must be
available only to a fortunate few or that the law should be
allowed to be prostituted by the vested interests for protecting C
and upholding the status quo under the guise of enforcement
of their civil and political rights. The poor too have civil and
political rights and the rule of law is meant for them also, thought
today it exists only on paper and not in reality. If the sugar
barons and the alcohol kings have the fundamental right to
D
carry on their business and to fatten their purses by exploiting
the consuming public, have the chamars belonging to the lowest
strata of society no fundamental right to earn an honest living
through their sweat and toil? The former can approach the
courts with a formidable army of distinguished lawyers paid in
four or five figures per day and if their right to exploit is upheld E
against the Government under the label of fundamental right,
the courts are praised for their boldness and courage and their
independence and fearlessness and applauded and acclaimed.
But, if the fundamental right of the poor and helpless victims
of injustice is sought to be enforced by public interest litigation,
F
the so-called champions of human rights frown upon it as waste
of time of the highest court in the land, which, according to
them, should not engage itself in such small and trifling matters.
Moreover, these self-styled human rights activists forget that
civil and political rights, priceless and invaluable as they are
for freedom and democracy, simply do not exist for the vast G
masses of our people. Large numbers of men, women and
children who constitute the bulk of our population are today
living a sub-human existence in conditions of object poverty;
utter grinding poverty has broken their back and sapped their
moral fiber. They have no faith in the existing social and
H
1006 SUPREME COURT REPORTS [2023] 8 S.C.R.
A economic system. What civil and political rights are these poor
and deprived sections of humanity going to enforce? This was
brought out forcibly by W. Paul Gormseley at the silver jubilee
celebrations of the Universal Declaration of Human Rights at
the Banaras Hindu University :
B “Since India is one of those countries which has given
a pride of place to the basic human rights and freedoms in
its Constitution in its Chapter on Fundamental Rights and
on the Directive Principles of State Policy and has already
completed twenty-five years of independence, the question
may be raised whether or not the fundamental rights
C enshrined in our Constitution have any meaning to the
millions of our people to whom food, drinking water, timely
medical facilities and relief from disease and disaster,
education and job opportunities still remain unavoidable. We,
in India, should on this occasion study the human rights /
D declared and defined by the United Nations and compare
them with the rights available in practice and secured by
the law of our country.”
The Only solution for making civil and political rights
meaningful to these large sections of society would be to
E remake the material conditions and restructure the social and
economic order so that they may be able to realize the
economic, social and cultural rights. There is indeed close
relationship between civil and political rights on the one hand
and economic, social and cultural rights on the other and this
relationship is so obvious that the International Human Rights
F Conference in Teheran called by the General Assembly in 1968
declared in a final proclamation:
“Since human rights and fundamental’ freedoms are
indivisible, the full realization of civil and political rights
without the enjoyment of economic, social and cultural rights
G is impossible.”
Of Course, the task of restricting the social economic
order so that the social and economic rights become a
meaningful reality for the poor and lowly sections of the
community is one which legitimately belongs to the legislature
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1007
ORISSA AND ORS. [M. R. SHAH, J.]
and the executive, but mere initiation of social and economic A
rescue programmes by the executive and the legislature would
not be enough and it is only through multi-dimensional strategies
including public interest litigation that these social and economic
rescue programmes can be made effective. Public interest
litigation, as we conceive it, is essentially a cooperative or
B
collaborative effort on the part of the petitioner, the State or
public authority and the court to secure observance of the
constitutional or legal rights, benefits and privileges conferred
upon the vulnerable sections of the community and to reach
social justice to them. The state or public authority against
whom public interest litigation is brought should be as much C
interested in ensuring basic human rights, constitutional as well
as legal, to those who are in a socially and economically
disadvantaged position, as the petitioners who brings the public
interest litigation before the court. The State or public authority
which is arrayed as a respondent in public interest litigation
D
should, in fact, welcome it, as it would view it an opportunity to
right a wrong or to redress an injustice done to the poor and
weaker sections of the community whose welfare is and must
be the prime concern of the State or the public authority.”
In S.P Gupta v. Union of India and others, AIR 1982
SC 149, the apex Court held as under: E
“We would therefore hold that any member of public
having sufficient interest can maintain an action for judicial
redress for public injury arising from breach of public duty or
from violation of some provision of the Constitution or the law
and seek enforcement of such public duty and observance of F
such constitutional or legal provision. This is absolutely essential
for maintaining the rule of law, furthering the cause of justice
and accelerating the pace of realization of the constitutional
objective “Law”, as pointed out by Justice Krishna Iyer in
Fertilizer Corporation Kamgar Union v. Union of India, AIR G
1981 SC 344,” is a social auditor and this audit function can be
put into action when some one with real public interest ignites
the jurisdiction ...... :. Another point which requires emphasis
is that cases may arise where there is undoubtedly public injury
by the act or omission of the State or public authority but such
H
1008 SUPREME COURT REPORTS [2023] 8 S.C.R.
A act or omission also causes a specific legal injury to an individual
or to a specific class or group of individuals. In such cases, a
member of the public having sufficient interest can certainly
maintain an action challenging the legality of such act or
omission.”
B In the case of Janata Dal Vs. H.S. Chowdhary, reported
in AIR 1993 SC 892, the Supreme Court taking note of the
observations made in the case of S.P. Gupta (supra) and number
of its earlier decisions, held as under:
“It is thus clear that only a person acting bona fide having
C sufficient interest in the proceeding of PIL will alone have a
locus standi and can approach the court to wipe out the tears
of the poor and needy, suffering from violation of their
fundamental rights, but not a person for personal gain or private
profit or political motive or any oblique consideration. Similarly,
a vexatious petition under the colour or PIL brought before the
D court for vindicating any personal grievance, deserves rejection
at the threshold.
It is depressing to note that on account of such trumpery
proceedings initiated before the courts, innumerable days are
wasted which time otherwise could have been spent for the
E disposal of cases of the genuine litigants. Though we are second
to none in fostering and developing the newly invented concept
of PIL and extending our Ione arm of sympathy to the poor,
the ignorant. the oppressed and the needy whose fundamental
rights are infringed and violated and whose grievance go
F unnoticed, unrepresented and unheard; yet we cannot avoid
but express our opinion that while genuine litigants with
legitimate grievance relating to civil matters involving properties
worth hundreds of millions of rupees and criminal cases in
which persons sentenced to death facing gallows under untold
agony and persons sentenced to life imprisonment and kept in
G incarceration for long years, persons suffering from the undue
delay in service matters, Government or private persons
awaiting the disposal of tax cases wherein huge amounts of
public revenue or unauthorized collection of tax amounts are
locked up, detenus expecting their release from the detention
H orders etc. etc. are all standing in a long serpentine queue for
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1009
ORISSA AND ORS. [M. R. SHAH, J.]
years with the fond hope of getting into the courts and having A
their grievances redressed, the busybodies, meddlesome
interlopers, wayfarers or officious interveners having absolutely
no public interest except for personal gain or private profit
either for themselves or as proxy or others or for any other
extraneous motivation or for glare of publicity break the queue
B
muffing their face by wearing the mask of public interest
litigation, and get into the courts by filing vexatious and frivolous
petitions and thus criminally waste the valuable time of the
courts and as a result of which the queue standing outside the
doors of the Court never moves which piquant situation creates
a frustration in the minds of the genuine litigants and resultantly C
they lose faith in the administration of our judicial system”.
(Emphasis added)
Further in a recent decision, in the case of State of
Uttaranchal Vs. Balwant Singh Chaufal & Ors., reported in
(2010) 3 SCC 402, the Supreme Court referring to large number D
of its earlier decisions held as under:
“33. The High Courts followed this Court and exercised
similar jurisdiction under Article 226 of the Constitution. The
Courts expanded the meaning of right to life and liberty
guaranteed under Article 21 of the Constitution. The rule of E
locus standi was diluted and the traditional meaning of
“aggrieved persons” was broadened to provide access to justice
to a very large section of the society which was otherwise not
getting any benefit from the judicial system. We would like to
term this as the first phase or the golden era of the public
interest litigation. We would briefly deal with important cases F
decided by this court in the first phase after broadening the
definition of “aggrieved person”
36. Public interest litigation is not in the nature of
adversarial litigation but it is a challenge and an opportunity to
the Government and its officers to make basic human rights G
meaningful to the deprived and vulnerable sections of the
community and to assure them social and economic justice
which is the signature tune of our constitution. The Government
and its officers must welcome public interest litigation because
it would provide them an occasion to examine whether the H
1010 SUPREME COURT REPORTS [2023] 8 S.C.R.
A poor and the downtrodden are getting their social and economic
entitlements or whether they are continuing to remain victims
of deception and exploitation at the hands of strong and
powerful sections of the community and whether social and
economic justice has become a meaningful reality for them or
it has remained merely a teasing illusion and a promise of
B
unreality, so that in case the complaint in the public interest
litigation is found to be true, they can in discharge of their
constitutional obligation root out exploitation and injustice and
ensure to the weaker sections their rights and entitlements.
39. The origin and evolution of public interest litigation
C in India emanated from realization of constitutional obligation
by the Judiciary towards the vast sections of the society - the
poor and the marginalized sections of the society. This
jurisdiction has been created and carved out by the judicial
creatively and craftsmanship.
D 40. In M.C. Mehta v. Union of India this Court
observed that Article 32 does not merely confer power on this
Court to issue direction, order or writ for the enforcement of
fundamental rights. Instead, it also lays a constitutional obligation
on this Court to protect the fundamental rights of the people.
E The Court asserted that, in realization of this constitutional
obligation, “it has all incidental and ancillary power including
the power to forge new remedies and fashion new strategies
designed to enforce the fundamental rights”. The Court realized
that because of extreme poverty, a large number of sections
of society cannot approach the court. The fundamental rights
F have no meaning for them and in order to preserve and protect
the fundamental rights of the marginalized section of the society
by judicial innovation and creativity stated giving necessary
directions and passing order in the public interest.
41. The development of public interest litigation has been
G an extremely significant development in the history of the Indian
jurisprudence. The decisions of the Supreme Court in the 1970s
loosened the strict locus standi requirements to permit filing of
petitions on behalf of marginalised and deprived sections of
the society by public spirited individuals, institutions and/or
H bodies. The higher courts exercised wide powers given to them
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1011
ORISSA AND ORS. [M. R. SHAH, J.]
under Articles 32 and 226 of the Constitution. The sort of A
remedies sought from the Courts in the public interest litigation
goes beyond award of remedies to the affected individuals
and groups. In suitable cases, the Courts have also given
guidelines and directions. The Courts have monitored
implementation of legislation and even formulated guidelines
B
in the absence of legislation. If the cases of the decades of 70s
and 80s are analysed, most of the public interest litigation cases
which were entertained by the courts are pertaining to
enforcement of fundamental rights of marginalised and deprived
sections of the society.
64. In view of the clear pronouncement of law in the aforesaid C
cases by the Apex Court this Court has to interfere with the
acquisition proceedings and grant of Government lands in favour
of the Beneficiary Company to protect the public interest. Hence
we have to answer the aforesaid points in favour of the petitioner
and against the opposite parties. D
65. For the reasons stated supra, the factual contentions urged by
the learned Advocate General, placing reliance upon the report of
the Additional Secretary to Tourism Department, is wholly contrary
to the Gazette Notification of 1984 referred to supra and the
Satellite Map issued by the Forest Department to the petitioners, E
which is produced for our perusal. Further the legal contentions
urged on behalf of the Company by Mr. Sanjit Mohanty, learned
Senior Counsel that the petitioners have abused the process of
this Court claiming that they are public spirited persons, is also
untenable in law for the reason that they have established the
case that interest of the public of the locality will be affected and F
also there will be violation of the Rule of the law if the acquisition
of lands and grant of leasehold rights in respect of Government
lands in favour of beneficiary Company is held to be not legal and
valid and therefore we have to hold that there is no abuse of the
process of this Court by the petitioners in approaching this Court G
espousing the public cause and public interest as the act of the
state Government is in contravention of the Notification issued by
the State Government way back in the year 1984 declaring certain
lands nearby the lands acquired, as Wild life Sanctuary and the
documents produced by the petitioners to prove the fact that two
H
1012 SUPREME COURT REPORTS [2023] 8 S.C.R.
A river are flowing on the acquired lands. For the reasons stated
supra we are of the view that the petitioners in the PIL writ petitions
have established that they are bona fide public spirited persons
who are very much interested in protecting the public interest and
see that the State Government discharged its responsibilities and
fundamental duties towards the public of the locality keeping in
B
view ‘’the doctrine of public trust” upon the public properties.
The disposal of the earlier writ petition filed by nine persons
referred to supra upon which reliance is placed by the learned
Senior Counsel on behalf of the Company in support of his
contention that the writ petitioners in the PIL have abused the
C process of this Court is not tenable in law, as this Court has not
decided the case on merits by answering the substantial issues
that arose for its consideration. In the present writ petitions by
urging tenable grounds they have made out a strong case for
granting the reliefs. If the PIL petitions are not allowed there will
be a continuing wrong of the State Government and the beneficiary
D
Company, which would violate the human rights of the residents
of the locality where the lands are acquired and land owners/
interested persons. They are small holders of the lands who belong
to the Marginalized sections of the society and therefore they
have no access to the justice for which they have got constitutional
E right under Article 39A of the Constitution and hundreds acres of
Government lands are granted in favour of the company is utter
violation of law.
66. For the foregoing reasons, absolutely there is no substance in
the contentions urged by the learned Senior counsel on behalf of
F the Company that there is no public interest involved in these
cases of PIL writ petitions filed by the petitioners and they have
abused the process of the Court is misconceived and wholly
untenable in law and the said contention is required to be rejected
and the public interested litigation writ petitions also have to be
allowed.
G
Answer to Point Nos. 14 and 15:
67. We have answered all the points framed in these petitions
against the State Government and the beneficiary Company by
recording our reasons and we have held that the acquisition
H proceedings from the stage of initiation till the date of purported
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1013
ORISSA AND ORS. [M. R. SHAH, J.]
awards which in fact and law not awarded and the alleged taking A
over the possession of the lands is in flagrant violation of the
statutory provision of Section 4, 5A, 6, 9, 10, 11, 12, (2), 23, 24,
read with the provisions under Part - VII of the Land Acquisition
Act, 1894. We have also answered the points that arose for our
consideration in the Public interest Litigation holding that the
B
initiation of the acquisition proceedings in favour of the beneficiary
company, on the requisition made by the Vedanta Foundation by
misrepresenting fact and playing fraud on the State Government,
has vitiated the entire acquisition proceedings. We have further
answered that the public interest at large is affected and there is
violation of rule of law. Therefore, we have also held the writ C
petitions filed by the petitioners as public interest litigation are
also required to be allowed and made observation that the
petitioners in those petitions, apart from public interest, they have
pleaded on behalf of small land holders who have no sustenance
to approach this Court to fight litigation. Therefore, the acquisition
D
proceedings in its entirety in respect of persons who have
approached this Court and even who have not approached this
Court are liable to be quashed for the reason that there is flagrant
violation of the aforesaid provisions of the Land Acquisition Act
as observed by Supreme Court in the case of H.M.T House
Building Co-operative Society Vs. Syed Khader & Ors, reported E
in AIR 1995 SCC 2244. The Supreme Court, while answering the
legal questions that arose for consideration, held that prior approval
of the Government is required under Section 44-A but as the same
has not been followed, the entire acquisition proceedings was
quashed. Further, the Supreme Court directed in the above referred
F
case the State Government and the Society which was in the
possession, that lands shall be resorted to the respective land
owners irrespective of the fact whether they had challenged the
acquisition of their lands or not and at paragraph 25 of its judgment
has directed as hereunder:
“26. We direct that as a result of quashing of the land G
acquisition proceedings including the notification as aforesaid,
the possession of the lands shall be restored to the respective
landowners irrespective of the fact whether they had
challenged the acquisition of their lands or not. On
restoration of the possession to the landowners they shall H
1014 SUPREME COURT REPORTS [2023] 8 S.C.R.
A refund the amounts received by them as compensation ·or
otherwise in respect of their lands. The appellant, the
respondents and the State Government including all
authorities/ persons concerned shall implement the aforesaid
directions at an early date.”
B We are in complete agreement with the view taken by the High
Court while entertaining the writ petitions and the Public Interest Litigation
petitions.
8.3 The grounds on which the High Court has set aside the entire
acquisition proceedings by holding that the same is vitiated by non-
C compliance of the relevant provisions of the Act, 1894, have been referred
to and reproduced hereinabove.
8.4 At the outset, it is required to be noted that the entire acquisition
proceedings / proceedings came to be initiated at the instance of the
Vedanta Foundation, which commenced in the month of April, 2006.
D Initially, the company asked the Government of Orissa specifically to
make available for it 15,000 acres of contiguous land around Nuanai,
Puri District in Bhubaneshwar-Puri-Konark by 15.06.2006. The process
for identifying the suitable locations was by the company. Even from the
presentation made to the Chief Minister at the relevant time and the
relevant clauses of MoU dated 19.07.2006 and even the Section 41
E agreement executed between the Government of Orissa and the Anil
Agarwal Foundation, it can be seen that the land was identified by the
company and not by the Government of Orissa. The same has been
dealt with and considered by the High Court in extenso.
8.5 At this stage, it is required to be noted that initiation of the
F acquisition proceedings was by the Vedanta Foundation and thereafter
by the Anil Agarwal Foundation, which admittedly at the relevant time
and as on 19.07.2006 was a private company having three Directors on
its Board and less than seven members. It is the case on behalf of the
appellants that as subsequently the Anil Agarwal Foundation, which at
G the relevant time was a private company was converted to public company
as on 13.12.2006 namely, viz., the date when the first Section 4(1)
notification was issued and the relevant date for consideration would be
13.12.2006 has no substance and cannot be accepted. As observed
hereinabove, the initiation of the proceedings to acquire the identified
lands, identified by the appellant company was in the month of April/
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1015
ORISSA AND ORS. [M. R. SHAH, J.]
June, 2006, which was followed by the MoU dated 19.07.2006. A
Therefore, the relevant date for consideration would be 19.07.2006 and
not 13.12.2006 as sought to be contended on behalf of the appellants.
8.6 At this stage, it is required to be noted that even otherwise the
subsequent alleged conversion from private company to public company
was an attempt to get out of the statutory provision under the Act, 1894. B
The Law Department specifically observed that the land cannot be
acquired by private company for the purposes for which the lands were
sought to be acquired, only thereafter the appellants changed the status
of the company from private company to public company. The aforesaid
was a mala fide exercise on the part of the appellants.
C
8.7 It is further required to be noted that when the appellant tried
to change its status from private to public company, the same was subject
to compliance of Sections 23, 31, 189(2) and 192 of the Companies Act,
1956. As observed and the findings recorded by the High Court and
even from the RTI query, it is clear that the appellant did not furnish the
certified copy of the Articles of Association (as amended) as required D
under the provision of Section 31(2A). It is the case on behalf of the
appellant that the appellant successfully converted into the public company
on 23.11.2006 and it increased number of members from 3 to 7 and in
terms of Section 44 of the Companies Act, 1956, it amended its Articles
of Association to delete the restriction on free transferability of the shares E
and the same has been acknowledged by the Registrar of Companies
(ROC) by acknowledgment dated 21.02.2007 and 03.03.2011 is
concerned, it is required to be noted and as observed hereinabove the
relevant date for consideration would be June, 2006 and in any case
19.07.2006 when the MoU was entered into. Even the subsequent
acknowledgment by the ROC was on 21.02.2007 and 03.03.2011 even F
much after Section 4(1) notification. Therefore, as rightly observed and
held by the High Court legally, the appellant was not converted to public
company, which as such was a Section 25 company and therefore, not a
public company. At this stage, Section 44B of the Act, 1894 is required
to be referred to, which reads as under:- G
“44B. Land not to be acquired under this Part
except for certain purpose for private companies other
than Government companies. - Notwithstanding anything
contained in this Act, no land shall be acquired under this Part,
except for the purpose mentioned in clause (a) of sub-section H
1016 SUPREME COURT REPORTS [2023] 8 S.C.R.
A (1) of section 40, for a private company, which is not a
Government company.
Explanation. - “Private company” and “Government
company” shall have the meaning respectively assigned to them
in the Companies Act, 1956 (1 of 1956).”
B 8.8 As per Section 44B of the Act, 1894, notwithstanding anything
contained in the Act, no land shall be acquired under Part VII, except
for the purpose mentioned in clause (a) of sub-section (1) of Section 40,
for a private company which is not a Government company. As per the
Explanation, a “private company” shall have the meaning assigned to it
C in the Companies Act, 1956. As per Section 40(1) read with Section 39,
a previous consent of appropriate Government and execution of the
agreement is necessary (Section 39) and which shall not be given unless
the appropriate Government be satisfied, either on the report of the
Collector under Section 5A, sub-section (2) or by an enquiry held provided
that the purpose of the acquisition is to obtain the land for the erection of
D dwelling-houses for workmen employed by the company or for the
provision of amenities directly connected therewith. Sections 39 and 40
reads as under:-
“39.Previous consent of appropriate Government and
execution of agreement necessary. - The provisions of sections
E 6 to 16 (both inclusive) and sections 18 to 37 (both inclusive) shall
not be put in force in order to acquire land for any company under
this Part, unless with the previous consent of the appropriate
Government, not unless the Company shall have executed the
agreement hereinafter mentioned.
F 40. Previous enquiry. - (1) Such consent shall not be given
unless the appropriate Government be satisfied, either on the report
of the Collector under section 5A, sub-section (2), or by an enquiry
held as hereinafter provided, -
(a) that the purpose of the acquisition is to obtain land
G for the erection of dwelling houses for workmen employed by
the Company or for the provision of amenities directly
connected therewith, or
(aa) that such acquisition is needed for the construction
of some building or work for a Company which is engaged or
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1017
ORISSA AND ORS. [M. R. SHAH, J.]
is taking steps for engaging itself in any industry or work which A
is for a public purpose, or
(b) that such acquisition is needed for the construction
of some work, and that such work is likely to prove useful to
the public.
(2) Such enquiry shall be held by such officer and at B
such time and place as the appropriate Government shall
appoint.
(3) Such officer may summon and enforce the attendance
of witnesses and compel the production of documents by the
same means and, as far as possible, in the same manner as is C
provided by the Code of Civil Procedure, 1908 (5 of 1908) in
the case of a Civil Court.”
8.9 Thus, at the relevant time, when the company was a private
company, in view of the bar under Section 44-B, the lands in question
could not have been sought to be acquired / acquired by the appellant D
company de hors Section 44B read with Section 40(1)(a) of the Act,
1894. Therefore, the High Court has rightly held that the acquisition was
illegal on the aforesaid ground.
8.10 At this stage, it is required to be noted that even at the relevant
time, the University in question was/is non-existent as no university has
E
come into existence under the University Grants Commission Act, 1956
nor under the Orrisa Universities Act. The case on behalf of the appellant
that the State legislature has already passed a bill to establish the university
is neither here nor there as even as per the appellant’s response, the
same is pending assent of the Governor.
8.11 Even the High Court has given specific findings on Issue No. F
3 that the entire acquisition proceedings in favour of the beneficiary
company by issuing a notification under Section 4(1) of the Act were
without complying with the mandatory provisions of Sections 39, 40 and
41 of the Act, 1894 read with Rules 3(2) and (4) of the Rules, 1963.
Rules 3 and 4 of the Rules, 1963 are as under:- G
“3. Land Acquisition Committee. - (1) For the purpose
of advising the appropriate Government in relation to acquisition
of land under Part VII of the Act, the appropriate Government
shall, by notification in the Official Gazette, constitute a Committee
to be called the Land Acquisition Committee. H
1018 SUPREME COURT REPORTS [2023] 8 S.C.R.
A (2) The Committee shall consist of -
(i) The Secretaries to the Government of the Departments of
Revenue, Agriculture and Industries or such other officers of
each of the said Departments as the appropriate Government
may appoint; and
B (ii) such other members as the appropriate Government may
appoint, for such term as that Government may, by order
specify, and
(iii) the Secretary to the Department or any officer nominated
by him dealing with the purposes for which the company
C proposes to acquire the land.
(3) The appropriate Government shall appoint one of the
members of the Committee to be its Chairman.
(4) The Committee shall regulate its own procedure.
D (5) It shall be duty of the Committee to advise the
appropriate Government on all matters relating to or arising out of
acquisition of land under Part VII of the Act, on which it is
consulted and to tender its advice within one month from the date
on which it is consulted :
E Provided that the appropriate Government may on a request
being made in this behalf by the Committee and for sufficient
reasons extend the said period to a further period not exceeding
two months.
4. Appropriate Government to be satisfied with regard
F to certain matters before initiating acquisition
proceedings. - (1) Whenever a Company makes an application
to the appropriate Government for acquisition of any land, that
Government shall direct the Collector to submit a report to it on
the following matters, namely :-
G (i) that the Company has made its best endeavour to find out
lands in the locality suitable for the purpose of the acquisition;
(ii) that the Company has made all reasonable efforts to get
such lands by negotiation with the persons interested therein
on payment of reasonable price and such efforts have failed;
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1019
ORISSA AND ORS. [M. R. SHAH, J.]
(iii) that the land proposed to be acquired is suitable for the A
purpose;
(iv) that the area of land proposed to be acquired is not
excessive;
(v) that the Company is in a position to utilise the land
expeditiously; and B
(vi) where the land proposed to be acquired is good agricultural
land, that no alternative suitable site can be found so as to
avoid acquisition of that land.
(2) The Collector shall, after giving the Company a C
reasonable opportunity to make any representation in this behalf,
hold an enquiry into the matters referred to in sub-rule (1) and
while holding such enquiry he shall, -
(i) in any case where the land proposed to be acquired is
agricultural land, consult the Senior Agricultural Officer of the D
district whether or not such land is good agricultural land;
(ii) determine, having regard to the provisions of sections 23
and 24 of the Act, the approximate amount of compensation
likely to be payable in respect of the land which, in the opinion
of the Collector, should be acquired for the Company; and
E
(iii) ascertain whether the Company offered a reasonable price
(not being less than the compensation so determined), to the
persons interested in the land proposed to be acquired.
Explanation. - For the purpose of this rule “good agricultural
land” means any land which, considering the level of agricultural F
production and the crop pattern of the area in which it is situated,
is of average or above average productivity and includes a garden
or grove land.
(3) As soon as may be after holding the enquiry under sub-
rule (2), the Collector shall submit a report to the appropriate G
Government and a copy of the same shall be forwarded by that
Government to the Committee.
(4) No declaration shall be made by the appropriate
Government under section 6 of the Act unless -
H
1020 SUPREME COURT REPORTS [2023] 8 S.C.R.
A (i) the appropriate Government has consulted the Committee
and has considered the report submitted under this rule and
the report, if any, submitted under section 5-A of the Act; and
(ii) the agreement under section 41 of the Act has been executed
by the Company.”
B 8.12 At the relevant time, there was no Section 41 agreement at
all. Even no inquiry was made by the State Government in terms of Rule
4 read with Rule 3 of the Rules, 1963. Declaration under Section 6 could
not have been issued by the State Government without consulting the
Land Acquisition Committee to be constituted under Rule 3 of the Rules,
C 1963. Constituting the Core Committee by the State Government, which
was to coordinate the entire acquisition cannot be said to be constituting
the Land Acquisition Committee as required under Rule 3. The object
and purpose of constituting the Land Acquisition Committee under Rule
3 is to advise the appropriate Government on all matters relating to or
arising out of acquisition of land under Part VII of the Act, 1894 on
D which it is consulted and to tender its advise. Therefore, on this ground
also the land acquisition proceedings have been vitiated.
8.13 There is a non-compliance of mandatory requirement under
Rule 4 of the Rules, 1963. Before initiating land acquisition proceedings
for the company, the Government shall direct the Collector to submit a
E report to it on the mattes mentioned in Rule 4 including which are:-
“(i) that the Company has made its best endeavour to find out
lands in the locality suitable for the purpose of the acquisition;
(ii) that the Company has made all reasonable efforts to get such
F lands by negotiation with the persons interested therein on payment
of reasonable price and such efforts have failed;
(iii) that the land proposed to be acquired is suitable for the purpose;
(iv) that the area of land proposed to be acquired is not excessive;
(v) that the Company is in a position to utilise the land expeditiously;
G and
(vi) where the land proposed to be acquired is good agricultural
land, that no alternative suitable site can be found so as to avoid
acquisition of that land.”
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1021
ORISSA AND ORS. [M. R. SHAH, J.]
8.14 As per Rule 4(2)(i) in any case where the land proposed to A
be acquired is agricultural lands, the Collector is required to consult the
Senior Agricultural Officer of the District whether or not such land is
good agricultural land. The Collector is also required to satisfy and
determine having regard to the provisions of Sections 23 and 24 of the
Act, the approximate amount of compensation likely to be payable in
B
respect of the land, which, in the opinion of the Collector, should be
acquired for the company.
8.15 From the material on record, the High Court has given the
specific findings that there is a non-compliance of mandatory provisions
under Rules 3 and 4 of the Rules, 1963 and therefore, the entire acquisition
proceedings for the beneficiary company has been vitiated and there C
are checks and balances and certain mandatory procedures and
requirements are to be satisfied, more particularly, when the lands are to
be acquired for the company, the same have to be adhered to and non-
consideration of the relevant aspects, which are mandatory to be
considered under Rule 4 would vitiate the entire acquisition proceedings D
as the subjective satisfaction by the State Government has been vitiated
on non-consideration of the relevant aspects, more particularly, the aspects
mentioned in Rule 4.
8.16 Even there is a specific finding recorded by the High Court
that the beneficiary company has not executed the MoU as required E
under Section 41 of the Act that the State Government even undertaking
as provided in sub-sections (1), (2) and (3) of Section 41. While ordering
so, in paragraph 53, the High Court has observed as under:-
“53. Further as could be seen from the original records of
the State Government that issuance of the preliminary notifications F
and obtaining agreements from the Vedanta Foundation and the
beneficiary company are also bad in law for the reason that we
have answered point no. 1 holding that the beneficiary company
is not a public company; it is a private company limited by
guarantee. Further acquisition of lands in its private company
limited by guarantee. Further acquisition of lands in its favour is G
permissible only in respect of the purpose of erection of dwelling
houses for workmen employed by the company or for the provision
amenities directly connected therewith.
The MOU dated 19.7.2006 executed by Vedanta Company
in favour of the State Government was before publishing the H
1022 SUPREME COURT REPORTS [2023] 8 S.C.R.
A preliminary notifications in respect of the acquired lands. On the
basis of the said MOU preliminary notification dated 13.12.2006
to 22.12.2006 were published. Therefore, the said agreement was
not executed by the beneficiary company in favour of the State
Government for publishing section 4(1) notifications by giving
previous consent by it as provided under section 39 of the LA.Act
B
to put the provisions of sections 4 to 16 (both inclusive) and section
18 to 37 in force. Therefore, there is no valid agreement before
the State Government to exercise the statutory power and grant
previous consent for publishing the preliminary notification. For
this reason, publication of the preliminary notifications on the basis
C of the said MOU executed by Vedanta Company does not enure
to the benefit of the beneficiary company. Therefore, the said
agreement is not valid as required under section 39 read with
section 41 of the LA.Act and, therefore, acquisition of lands by
publishing section 4 (1) notification in favour of the beneficiary
company is vitiated in law for the reason that before putting the
D
provisions of section 4 to 16 and 18 to 37 in order to acquire land
in favour of the beneficiary company, no previous consent of the
State Government was there and such consent also shall not be
given unless the company has executed the agreement in terms
of section 41 of the LA.Act. Therefore, the agreement is not only
E not in conformity with sub-sections (1) to (4) and (4A) of section
41, but the same is not legal and valid for the reason that much
prior to the said agreement, preliminary notification were published
and thereafter final notifications were published which are not
permissible in law. Therefore, the same is in contravention of
section 39 of the Act.”
F
8.17 The most important aspect, which is required to be considered
is the non-application of mind by the State Government on environmental
aspects and passing of two rivers from the acquired lands in question. It
is not in dispute that from the lands in question two rivers namely ‘Nuanai’
and ‘Nala’ are flowing, which as such were acquired by the State
G Government. How the maintenance of the rivers etc. can be handed
over to the beneficiary company. If the lands in question are continued
to be acquired by the beneficiary company, the control of the rivers
would be with the said private company, which would violate the Doctrine
of Public Trust. Even requiring the beneficiary company to maintain the
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1023
ORISSA AND ORS. [M. R. SHAH, J.]
flow of above two rivers may also affect the residents of the locality at A
large.
8.18 It is also required to be noted that just across the road, there
is a Wildlife Sanctuary, which is just adjacent across the road to the
proposed university and the lands acquired. Therefore, the large-scale
construction for the establishment of the proposed university as observed B
by the High Court will also adversely affect the Wildlife Sanctuary, entire
Eco system and the ecological environment in the locality. It is a duty of
the State to protect the Wildlife Sanctuary and it may affect the entire
Eco system and the ecological environment in the locality. It is also required
to be noted that even the distance of the sea from the proposed Vedanta
University is approximately 2000 meters. Merely because the Balukhand C
Wildlife Sanctuary is separated from the proposed site by a highway –
Puri-Konark Marine Drive, cannot be a ground to acquire the huge lands
for the proposed university and as rightly observed by the High Court,
the same will adversely affect the Wildlife Sanctuary and the entire Eco
system and the ecological environment in the locality. The aforesaid D
aspects has not at all been considered by the State Government and/or
the Collector and/or the appropriate authority even while considering
the proposal and/or even the objections under Section 5A of the Act,
1894.
8.19 Even otherwise, there is a non-application on the part of the
State Government on the requirement of the lands by the beneficiary E
company. It is required to be noted that the lands were proposed to be
acquired at the instance of one foundation / company and the State
Government was dealing with the lands belonging to the agricultural
landowners. It is required to be noted that the Government is holding a
public trust and has to deal with the lands belonging to private landowners, F
more particularly, agricultural landowners in accordance with law. The
State Government could not have considered the proposal from only one
beneficiary/trust. There may be other public trusts / companies, who
might be interested in establishing such university. Even no proper inquiry
seems to have been initiated by the Government / Collector while
considering the proposal by the beneficiary company. It is required to be G
noted that initially, 15,000 acres of the agricultural lands was sought to
be acquired for the proposed university. Ultimately, approximately, 8000
acres of the land belonging to the private landowners / agricultural
landowners came to be acquired. The State Government has also handed
H
1024 SUPREME COURT REPORTS [2023] 8 S.C.R.
A over the possession of approximately 495 acres of land belonging to the
State Government including the Gochar Lands etc., which could have
been used for the other public purpose and even for the Gochar Lands
also.
8.20 From the material on record, it appears that undue benefits
B were proposed / in fact offered and given to the beneficiary company
providing undue largesse like:-
(i) total autonomy to Vedanta University and its authorities with
regard to administration, admission, fee structure, curriculum
and faculty selection;
C (ii) proposed university to have complete immunity from any
reservation laws of the State Government;
(iii) all assistance in getting regulatory approvals from UGC,
AICTE etc.;
(iv) the Government agreed to provide 4-lane road from
Bhubaneshwar city to the proposed site;
D
(v) in the agreement, the Government also agreed to make the
land use/ zoning plan in the 5 km radius from the university
boundary only after Consultation with Vedanta;
(vi) the Government also promised to exempt all state levies/
taxes/ duties namely, viz. VAT, Works Contract Tax, Stamp
E
Duty and Entry tax on R&D equipment, educational aids,
lab equipment and tools, and construction materials from
the date of signing of the MoU;
(vii) the Government also promised to assist the Foundation in
obtaining NOC from SPCB and all clearances from the
F Central Government;
(viii) the Government also promised to assist the Foundation in
arranging rapid EIA and EMP for the project;
(ix) the Government also promised to provide extraordinary huge
amounts of electricity and water.
G 8.21 It is not appreciable why the Government offered such an
undue favour in favour of one trust/ company. Thus, the entire acquisition
proceedings and the benefits, which were proposed by the State
Government were vitiated by favourism and violative of Article 14 of
the Constitution of India.
H
ANIL AGARWAL FOUNDATION ETC. ETC. v. STATE OF 1025
ORISSA AND ORS. [M. R. SHAH, J.]
8.22 From the aforesaid and the detailed findings recorded by the A
High Court reproduced hereinabove, we are more than satisfied that the
High Court has not committed any error and in fact the High Court was
justified in setting aside the entire acquisition proceedings, which has
been vitiated by non-compliance of the statutory provisions under the
Act, 1894 and the Rules, 1963 and vitiated by mala fides and favourism
B
and is a clear case of the non-application of mind on relevant aspects.
We are in complete agreement with the view taken by the High Court.
8.23 The submission on behalf of the appellant that now the
appellant is ready to confine to acquisition of 3837 acres of land only and
that they are now willing to exclude the lands belonging to 7 land losers,
who have filed the writ petitions, from the acquisition proceedings and/ C
or the landowners before this Court and/or the land belonging to the land
losers before this Court is concerned, it will strengthen our finding that
there was no proper inquiry with respect to the requirement. As observed
hereinabove, initially, 15,000 acres was proposed to be acquired, which
is now reduced to 3837 acres. Meaning thereby, the proposal was for D
exaggerated demand. This was mala fide intention on the part of the
appellant company / foundation. At this stage, it is required to be noted
that it was the specific case on behalf of the original writ petitioners,
more particularly, the Public Interest Litigation petitioners that if such a
huge land would have been acquired and/or even the lands, which are
already acquired, would be misused and/or put to use for some other E
purpose like mining activities etc. At this stage, it is required to be noted
that the lands to be acquired are agricultural lands belonging to 6000
families and their only source of livelihood is on the agricultural lands,
which cannot be compensated in terms of money, therefore, the proposal
made now has to be rejected outright. F
9. In view of the above and for the reasons stated above, all these
appeals fail and the same deserve to be dismissed and are accordingly
dismissed with costs, which is quantified at Rs. 5 lakhs to be deposited
by the appellant – beneficiary company – Anil Agarwal Foundation with
the Registrar of this Court within a period of six weeks from today and
on such deposit, the same be transferred to the Orissa State Legal G
Services Authority.
Bibhuti Bhushan Bose Appeals dismissed.
(Assisted by : Rahul Rathi, LCRA)
H
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