MAHANADI COAL FIELDS LTD. & ANR.versusMATHIAS ORAM & ORS.

                       [2010] 8 S.C.R. 750


A           MAHANADI COAL FIELDS LTD. & ANR.
                              v.
                  MATHIAS ORAM & ORS.
               (SLP (Civil) No. 6933 of 2007)
                            JULY 19, 2010
B
         [AFTAB ALAM AND DR. B.S. CHAUHAN, JJ.]

        Land Acquisition:

c       Acquisition of land in tribal areas - Resolving of socio-
  economic issues - Need for - Explained - HELD: In the
  instant case, the lands were taken in acquisition as far back
  as in the year 1987, but the land-owners were never paid any
  compensation for their lands - After more than 20 years of
0 acquisition, . de notification of lands proposed - It has been
  stated that even no steps were taken for determining the
  market value of the lands - At the instance of the Court, the
  Solicitor General of India framed a scheme through which the
  whole matter could be resolved and compensation be paid
E not only to writ petitioners-respondents but to all those whose
  lands were acquired - The scheme stated to have been
  agreed to by the Central Government and the company for
  which the lands were acquired - Counsel for the writ
  petitioners-respondents has given his express consent to the
  Scheme - The scheme approved by the Court with certain
F clarifications and modifications as stated in the order - Coal
  Bearing Areas (Acquisition and Development) Act, 1957 - ss.
  4(1 ), 7, 9, 11 and 13 - Mines and Mineral (Development &
  Regulation) Act, 1957 - Indian Forest Act, 1927 - Forest
  Conservation Act, 1980 - Land Acquisition Act, 1894.
G
        Words and Phrases:

         'Grss Domestic Product' and 'Human Development Index'
    in Indian context-Need to maintain a balance-Discussed.

H                                750
MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 751
              ORAM & ORS.
     Constituent Assembly debate dated 25. 11. 1949-                  A
referred to.

   Human Development Report 2009 (published by
UNDP)-referred to.

    CIVIL APPELLATE JURISDICTION : SLP (CIVIL) No.                    B
6933 of 2007.

    From the Judgment & Order dated 13.11.2006 of the High
Court of Orissa in W.P. (C) No. 11463 of 2003.

    Mahabeer Singh, Aishwarya Bhati, Rashid Khan, Karan
                                                                      c
Singh Bhati for the Petitioners.

    Gopal Subramanium, Sol. General, Balaji Subramanian,
J.R. Das, S. Mishra, P.P. Nayak for the Respondents.
                                                                      D
    The order of the Court was delivered by

                             ORDER
     AFTAB ALAM,J. 1. Speaking in the Constituent Assembly .
on November 25, 1949 Dr. B.R. Ambedkar, the chief architect E
of the Constitution of India made one of the most incisive
remarks on it:

    "On the 26th of January 1950, India would be a democratic
    country in the sense that India from that day would have a        F
    government of the people, by the people and for the
    people. The same thought comes to my mind.'What would
    happen to her democratic Constitution? Will she· be able
    to maintain it or will she lose it again? This is the second
    thought that comes to my mind and makes me as anxious             G
    as the first. ..

    ... On the 26th of January 1950, we are going to enter into
    a life of contradictions. In politics we will have equality and
    in social and economic life we will have inequality. In
    politics we will be recognizing the principle of one man one      H
    752      SUPREME COURT REPORTS                  [2010] 8 S.C.R.


A         vote and one vote one value. In our social and economic
          life, we shall, by reason of our social and economic
          structure, continue to deny the" principle of one man one
          value. How long shall we continue to live this life of
          contradictions? How long shall we continue to deny equality
B         in our social and economic life? If we continue to deny it
          for long, we will do so only by putting our political
          democracy in peril. We must remove this contradiction at
          the earliest possible moment or else those who suffer from
          inequality will blow up the structure of political democracy
c         which this Assembly has so laboriously built up."

          What would have been Dr. Ambedkar's reaction to the
          facts of this case? This is one of the thoughts in our mind
          while dealing with the case.

D      2. Since independence India has indeed covered a long
  way on the path of development and economic growth. It
  continues to take long strides on that path. But how far have
  we been able to live down the fears expressed by Dr.
  Ambedkar about our democratic Constitution? How far have
E we been able to get rid of the contradictions ;n our life? This
  case raises these difficult questions.

         3. We are anxious that India should develop and grow fast
    and become strong to take its rightful place in the comity of
    nations.
F
      4. Development is reckoned in terms of investments in
  urban infrastructure, roads and highways, communication,
  technology, extraction and commercial exploitation of minerals,
  generation of power, production of steel and other essential
G metals and alloys. Creation of wealth is of utmost importance.
  Redemption lies in GDP (Gross Domestic product).

      5. India does not lack material resources required for
  development. There are vast treasures of minerals lying buried
H deep inside its earth. But excavation of minerals from the
MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 753
      ORAM & ORS. [AFTAB ALAM, J.]

bosom of the earth and putting them to good industrial and          A
commercial use require lots of initial investment and highly
advanced technology. Those too are now available as blessings
of globalization. The imperialist's formula of "philanthropy plus
five percent" is the accepted norm. Public-Private Partnership
(PPP) is the latest mantra. For some reasonable profits,            B
companies and corporations, both Indian and multinational are
willing and ready not only to do the mining for us but also to
undertake the development of the region by providing schools,
hospitals, and many similar amenities and facilities to the local
population. Even the public sector undertakings are not lagging     c
far behind in the race.

     6. But there is one catch. There is also the involvement of
the human factor. Most of the mineral wealth of India is not
under uninhabited wasteland. It lies mostly under dense forests
and areas inhabited by people who can claim to be the oldest        D
dwellers of this ancient country. Any large scale mining,
therefore, needs not only huge investments and .application of
highly developed technology but also en masse relocation of
the people dwelling upon the land that needs to be mined or at
any rate getting the land freed from its inhabitants, for whom it   E
may be the only source of sustenance. But then we have the
laws to handle such situations. There is the Mines and Minerals
(Development & Regulation), Act 1957, the Indian Forest.Act,
1927, the Forest Conservation Act, 1980, (in many States) laws
restricting and regulating trade in forest produce and above all    F
the Land Acquisition Act, 1894 and its clone the Coal Bearing
Areas (Acquisition and Development) Act, 1957 that envisage
compulsory acquisition of land by the government for any public
purpose on payment of its market value (plus solatium for the
compulsory nature of acquisition!) to the land holder. The law      G
is based on the twin sound principles of the eminent domain
of the sovereign and the largest good of the largest number.

    7. Seen thus, the whole issue of development appears to
be so simple, logical and commonsensical. And yet, to millions
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    754       SUPREME COURT REPORTS                   [2010] 8 S.C.R.


A of Indians, development is a dreadful and hateful word that is
  aimed at denying them even the source of their sustenance. It
  is cynically said that on the path of 'maldevelopment' almost
  every step that we take seems to give rise to insurgency and
  political extremism (which along with terrorism are supposed
B to be the three gravest threats to India's integrity and
  sovereignty).

        8. The resistance with which the state's well meaning
  efforts at development and economic growth are met makes
C one to think about the reasons for such opposition to the state's
  endeavours for development. Why is the state's perception and
  vision of development at such great odds with the people it
  purports to develop? And why are their rights so dispensable?
  Why do India's GDP and HDI (Human Development Index,
  which is broadly used as measure of life expectancy, adult
D literacy and standard of living) present such vastly different
  pictures? With the GDP of $ 1.16Trillion (for 2008) Indian
  economy is twelfth largest in US Dollar terms and it is the
  second fastest growing economy in the world. But according
  to the Human Development Report 2009 (published by UNDP),
E the HDI for India is 0.612 (for 2007) which puts it at the 134th
  place among 182 countries. India has maintained the same
  HDI and rank since the previous year, and it continues to be
  categorized under "Medium Human Development".

F      9. The counter argument goes like this. It is very often the
  process of development that most starkly confirms the fears
  expressed by Dr. Ambedkar about our democracy. A blinkered
  vision of development, complete apathy towards those who are
  highly adversely affected by the development process and a
G cynical unconcern for the enforcement of the laws lead to a
  situation where the rights and benefits promised and
  guaranteed under the constitution hardly ever reach the most
  marginalized citizens.

          10. This is not to say that the relevant laws are perfect and
H
 MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 755
        ORAM & ORS. [AFTAB ALAM, J.]
very sympathetic towards the dispossessed. There are various           A
studies that detail the impact of dispossession from their lands
on tribal people. It is pointed out that even when laws relating
to land acquisition and resettlement are implemented perfectly
and comprehensively (and that happens rarely!), uncomfortable
quesijons remain. For a people whose lives and livelihoods are         B
intrinsically connected to the land, the economic and cultural shift
to a market economy can be traumatic.

      11. On many occasions laws are implemented only
partially. The scheme of land acquisition often comes with             C
assurances of schools, hospitals, roads, and employment. The
initial promises, however, mostly remain illusory. The aims of
income restoration and house resettlement prove to be very
difficult. Noncompliance with even the basic regulations causes
serious health problems for the local population and
contamination of soil and water.                                       D

    12. But there is yet another far worse scenario where even
the most basic obligation under the law is not complied with
and even the fig leaf of legality is dispensed with.
                                                                       E
     13. The case in question is a textbook example.

      14. But before going into the facts of the case two other
things need to be stated. This case comes from Orissa which
is one of the seven states where a particularly violent group of.
political extremists, has been able to gain sufficient strength to F
pose a threat to Constitutional governance of the state. This .·
group openly defies the democratic system of the country and
is committed to overthrow the Constitution by brutal and
murderous means. According to news paper reports, in the
district of Sundergarh, where the acquired lands are situated, G
the extremist group looted 550 kilograms of explosives in April
2003 and in August 2009 blew up a railway station.

     15. The other fact is thatthis is not an isolated case. We
                                                                       H
    756     SUPREME COURT REPORTS                  [201 OJ 8 S.C.R.


A   have come across many such cases of land acquisition.

       16. Now, to the facts of the case: Mahanadi Coalfields Ltd.,
  the petitioner before this Court, is one of the subsidiaries of
  Coal India Ltd., the biggest coal producing organisation in the
B country and one of the 'Navratnas' among India's public sector
  undertakings Mahanadi Coalfields Ltd. has filed this SLP
  against the judgment and order passed by Orissa High Court
  on November 13. 2006 in Writ Petition (Civil) No.11463 of
  2003. By the impugned judgment the High Court directed the
  Central Government and the petiuoner (respondent no.1 before
C the High Court) to "proceed forthwith in accordance with the
  provisions of the [Coal Bearing Areas (Acquisition and
  Development) Act, 1957] to determine the compensation
  payable to the land owners including the (writ) petitioners and
  make payment of the compensation as would be determined
D in accordance with law as expeditiously as possible, preferably
  within six months from the date of receipt of our order."

       17. This order was passed in connection with lands of the
  writ petitioners (respondents 1 to 27 before this court) and
E others that were taken in acquisition as far back as in the year
  1987.

        18. The Central Government issued the preliminary
  notification under section 4(1) of the Coal Bearing Areas
  (Acquisition and Development) Act, 1957 Act on February 11,
F 1987, giving notice of its intention to prospect for coal in
  Revenue Village Gopalpur, District Sundergarh, Orissa. The
  notification also covered the lands of the respondents. This was
  followed by another notification under section 7(1) of the Act
  on July 27, 1987 giving notice of the Government's intention to
G acquire the notified lands. Finally, the declaration of acquisition
  under section 9 of the Act was made by the notification issued
  on July 10, 1989 as the result of which the notified lands, along
  with all rights therein, vested absolutely in the Central
  Government. On March 20, 1993, the Central Government
H
MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 757
      ORAM & ORS. [AFTAB ALAM, J.]
issued the notification under section 11 of the Act vesting the     A
acquired land and all rights therein in the petitioner company,
retrospectively, with effect from November 17, 1991. It is
undeniable that the lands of the writ petitioners (respondents
before this court) were covered by the notifications under
sections 7, 9 and 11 of the Act. Nevertheless, the writ             B
petitioners, and others whose lands were similarly acquired,
were never paid any compensation for their lands. After a futile
running from pillar to post for about fourteen years, the writ
petitioners knocked the doors of the High court, claiming
compensation for their lands. Before the High Court, the            c
relevant facts as noted above, were all admitted. But it seems
that the claim of the writ petitioners was over shadowed by the
dispute between the coal company and the Central
Government. The coal company took the stand that the lands
of the writ petitioners, and some other lands, were not required    D
by it and it proposed de-notification of those lands (This, after
more than twenty years of acquisition!). On behalf of the Central
Government, however, it was stated that the coal company's
proposal for de-notification was rejected by order dated
September 12, 2006. The High Court then referred to section
                                                                    E
13(5) of the Act and pointed out that any person whose land is
acquired under section 9 of the Act must be paid compensation
after taking into consideration the factors enumerated under
that sub-section of section 13. The High Court expressed its
concern that the writ petitioners were not paid compensation
for their lands taken away from them more than two decades          F
ago and disposed of the writ petition with the direction to both
the coal company and the Central Government, as noted above.

     19. The Central Government, apparently, did not take
much notice of the High Court order but the coal company            G
brought the matter to this court. It seeks to challenge the High
Court order on the plea that it has no liability to pay
compensation for the lands acquired by the Central Government
since they are of no use for the purpose of mining operations
nor are they likely to be needed in the near future as per the      H
    758      SUPREME COURT REPORTS                  [2010] 8 S.C.R.


A mining plan approved by the Central Government. Apart from
  this, the petitioner has taken some rather strange pleas. It is
  pleaded that the acquisition proceedings were still incomplete
  because no steps were taken for determining the market value
  of the lands and no compensation was paid to the land holders.
B If this is not adding insult to injury we do not know what else is!
  It is also alleged the lands are not in possession of the coal
  company and they are still in the possession of the land holders,
  including the writ petitioners. This last allegation is strongly
  denied by the writ petitioners.
c         20. The SLP remains pending in this Court for the last
    three years. Now, twenty three years have passed and the writ
    petitioners remain unpaid of the compensation for their lands.
    In the meanwhile some of them (respondents 5 and 24) are
    reported to be dead. It was in these circumstances that on
D   January 9, 2010 we requested Mr. Gopal Subramanium, the
    Solicitor General for India, to assist the court on behalf of the
    Central Government. He immediately realised the gravity of the
    matter and the deep distress caused to the court by this case.
    He asked for some time to try to resolve the matter between
E   the Central Government and the coal company at his own level
    and to ensure that the land holders whose lands were acquired
    are paid lawful compensation without any further delay. On the
    last date (May 13, 2010) he informed this Court that he had
    been able to make the Central Government and the coal
F   company agree to a scheme through which the whole matter
    may be resolved and compensation may be paid not only to
    the writ petitioners but to all the land holders whose lands were
    acquired. The scheme proposed by Mr. Subramanium and
     agreed upon by the Central Government and the Coal
G    Company is as follows:

          "1. The land in Village Gopalpur, District Sundergarh,
          Orissa stands acquired by the Central Government and
          ownership is vested with MCL, which will determine and
          pay compensation to the erstwhile landowners.
H
MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 759
       ORAM & ORS. [AFTAB ALAM, J.]
  "2. In respect of vast portions of the acquired land            A
  (excluding the area where mining activities are being
  undertaken), actual physical possession was never taken.
  The State of Orissa and its officers are directed to assist
  MCL in taking actual physical possession of the acquired
  land.                                                           B

   "3. Since the matter pertains to an acquisition of 1987 i.e.
   more than two decades ago, the extent of actual physical
   possession needs to be re-ascertained, it is necessary
   that the genuine landowners, amount of compensation            C
   oayable, status of possession, use to which the land has
   been put in the last two decades, is discovered. The entire
   land needs to be surveyed again.

   "4. In accordance with the advice of the learned Solicitor
   General, a Claims Commission needs to be set up with           D
   representatives of the Central Government as well as
   MCL. It is submitted that the Claims Commission will
   consist of 3 Members:-

   (a) A former Judge of the High Court of Orissa
                                                                  E
   (Chairman);

   (b) An officer who has held a post/office equivalent to
   the rank of Secretary to the Government of India;

   (c)    An officer to be nominated by Chairman, Coal India      F
   Ltd.

   The Claims Commission will carry out the exercise referred
   to above and submit a report on the compensation payable
   and the persons to whom it should be paid, within a period     G
   six months.

   "5. The above-said report will be submitted to the Central
   Government, and upon formal approval by the Central
   Government, MCL will make payment within a further
   period of two months.                                          H
    760          SUPREME COURT REPORTS              (2010] 8 S.C.R.


A         "6. Some portions of the land have been determined to be
          unsuitable for the Petitioner having regard to physical
          features (mining being impossible, area being heavily
          populated, etc.). The Claims Commission will examine
          whether possession of such portions has been taken over
B         by the Petitioner. It would be open to the Claims
          Commission to recommend de-notification/release of the
          said land from acquisition.

          "7.     In view of the special facts obtaining above, the
          Central Government may be permitted to de-notify the said
c         land from the acquisition as a special case, since the land
          is not required and possession also was never taken.

          "8. Even in the case of the de-notified land, suitable
          compensation, in appropriate cases, may have to be paid
D         to the landowners. The Claims Commission may also give
          a report on this aspect of the matter.

          "9. The learned Solicitor General has opined that such
          matters of uncertain acquisition or pending compensation
          claims lead to unnecessary social tensions and the
E
          Petitioner must act in a spirit of good governance. Upon
          examination of all the surrounding villages. in the light of
          the opinion of the learned Solicitor General, for the sake
          of uniformity as well as fairness, the above exercise would
          be carried out for th~ following villages as well:
F
          i.      Sardega

          ii.     Jhupurunga

          iii.    Ratansara
G
          iv.     Tikilipara

          v.      Siarmal

          VI.     Tumulia
H
MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 761
      ORAM & ORS. [AFTAB ALAM, J.]
    vii.    Karlikachhar                                           A

    viii.   Ku Ida

    ix.     Bankibahal

    x.      Balinga                                                B

    xi.     Garjanbahal

    xii.    Bangurkela

    xiii.   Kiripsira                                              c
    xiv.    Lalma R.F.

    "It must be noted that in the case of Sardega and Tikilipara
    Villages, part-payment has already been made. Further,
    in the case of Bankibahal and Balinga Villages, full           D
    payment has already been made but possession has not
    been fully taken.

    "10. The Petitioner and the Central Government shall assist
    in the establishment of the Commission including the           E
    provision of suitable infrastructure. The honorarium
    payable to the Commission may be determined by this
    Hon'ble Court.

    "11. This Order is being passed with the agreement of all
                                                                   F
    parties and in the peculiar facts and circumstances of this
    case. The said order shall not operate as a precedent."

      21. The scheme proposed by Mr. Subramanium was
shown to Mr. Janaranjan Das, counsel, appearing for the writ
petitioners-respondents and he also gave his express consent       G
to it. We, accordingly, approve the scheme but with certain
clarifications and modifications as stated below.

    22. We nominate Mr. Justice A.K. Parichha, a former
                                                                   H
    762      SUPREME COURT REPORTS                  [2010] 8 S.C.R.


A Judge of the High Court of Orissa as Chairman of the
  Commission. Mr. Solicitor General in consultation with the
  Secretary, Ministry of Coal, Government of India, shall nominate
  an officer who has held a post/office equivalent to the rank of
  Secretary to the Government of India as one of the members
B of the Commission within two weeks from today. Similarly, the
  Chairman, Coal India Ltd. shall nominate an officer as the other
  member of the Commission. Mr. Justice A.K. Parichha, shall
  be paid honorarium, equal to the monthly salary of a sitting High
  Court Judge and he shall be entitled to all other facilities as
c available to a sitting judge of the High Court. The officer
  nominated by Mr. Subramanium/Secretary, Ministry of Coal,
  Government of India, shall similarly be entitled to honorarium
  and other facilities available to a serving officer of his rank. All
  the expenses of the Commission shall be borne by Coal India
0 Ltd. The Commission shall prepare its report as envisaged in
  the scheme, first in respect of the lands in village Gopalpur,
  District Sundergarh, Orissa, as soon as possible and in any
  event not later than four months from today. In case the
  Commission recommends de-notification/release of any portion
E of the lands earlier acquired, it would also determine the rate
  or the amount of compensation/mesne profit payable to the land
  holder. The Commission shall submit its report not to the
  Central Government but to this Court for approval and further
  directions. Any de-notification/release of the land would be only
  subject to further orders passed by this Court in light of the
F Commission's report. The Commission may proceed with the
  survey in relation to the acquired landS'in other villages, as
  suggested in paragraph 9 of the scheme only after submitting
  its report in respect of village Gopalpur and subject to further
  orders by this court.
G
        23. The officers of the State Government and the coal
  company shall extend full help and cooperation to the
  Commission in preparing the report and in the discharge of their
  duties in terms of the scheme.
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 MAHANADI COAL FIELDS LTD. & ANR. v. MATHIAS 763
       ORAM & ORS. [AF-TAB ALAM, J.]

     24. We record our deep appreciation of Mr. Subramanium           A
for sharing the feelings of the court and for his effort to resolve
this matter. We may, however, remind him that his task is not
over. It has only begun.

       25. Put up on receipt of the Commission's report.
                                                                      B
R.P.                                           Matter Adjourned.