Back
1999 Supreme(SC) 498
SUPREME COURT OF INDIA
S. N. Phukan, J.
Steel Authority of India Limited
Vs.
State of Madhya Pradesh
Decided on April 15, 1999
Land revenue is not payable in respect of land that has been exempted from such liability by special grant or contract with the State government.
Headnote:
LAND REVENUE - EXEMPTION - CONTRACT - RULES - LIABILITY OF COMPANY - TRANSFER OF LAND - SUCCESSOR IN INTEREST - LIMITATION - ASSESSMENT BARRED BY LIMITATION.
Fact of the Case:
The Central Government transferred land to a company wholly owned by it, Hindustan Steel Ltd., for the Bhilai Steel Plant. The State Government claimed land revenue from the company for the period 1962-87. The company contended that it was not liable to pay land revenue as the Central Government had already paid 25 times the land revenue as a one-time payment, in accordance with the agreement between the Central and State Governments and the rules framed by the Secretary of State in 1925.
Finding of the Court:
The Court held that the company was not liable to pay land revenue as the Central Government had already paid 25 times the land revenue as a one-time payment, in accordance with the agreement between the Central and State Governments and the rules framed by the Secretary of State in 1925. The Court also held that the privileges of or right to exemption accrued to the central government not to pay land revenue to the State government under Section 58 of the Code would also be available to the appellant company, as a successor in interest to the central government.
Issues: 1. Whether the company was liable to pay land revenue for the land in question? 2. Whether the assessment of land revenue was barred by limitation?
Ratio Decidendi: 1. The Court held that the company was not liable to pay land revenue as the Central Government had already paid 25 times the land revenue as a one-time payment, in accordance with the agreement between the Central and State Governments and the rules framed by the Secretary of State in 1925. 2. The Court did not entertain the issue of limitation as it held that the company was not liable to pay any land revenue.
Final Decision: The appeal was allowed. The impugned judgments and orders were set aside. The demand of the land revenue made by the Collector from the appellant was quashed.
( 1 ) THIS appeal is directed against the Judgment and Order passed by the Madhya Pradesh High court at Jabalpur in Misc. Petition No. 1826 of 1993.
( 2 ) A few facts leading to this appealdeserve to be noted at the outset for highlighting the grievance of the appellant in the present appeal.
( 3 ) THE central government, Ministry of Production wrote a letter dated 8th January, 1955 to the Che Chief Secretaries of the States of West Bengal, Bihar and Madhya Pradesh. In this letter it was indicated that it was under consideration of the central government to establish Russian technical assistance steel plants at three places in the three States. For this purpose a piece of land measuring about 50 sq. miles, would be required. Therefore, the central government by letter dated the 8/01/1955 wanted to know from the State governments whether the governments would be prepared to accord facilities. The said three facilities are stated below:-
" (1 50 sq. miles of land, free to the extent its the property of the State government, and guarantee of a ceiling cost for the acquisition of privately owned land, it being understood that any cost in excess of the guaranteed ceiling would be borne by the State government concerned.
(2 A guarantee of adequate and continuous water supply, as required for the steel plant, associated projects and the town, at rates to be mutually agreed upon between the State government and the government of India and/or an autonomous State Co. to be registered for the purpose.
(3 Guarantee of prior claim on all unleased mining concessions in respect of iron-ore, coal, limestone, dolomite and any other raw material discovered or to be discovered within the territory of the State concerned and required for the steel project. "
( 4 ) BY letter dated 11th of January, 1955 the government of Madhya Pradesh informed the central government that the State government was prepared to accord alt the above facilities.
( 5 ) ANOTHER letter was sent dated 25th of September, 1958 by the government of Madhya Pradesh bringing to the notice of the central government the rules framed by the secretary of State in 1925. Two salient features of the rules particularly A and B were stated in the said letter. These features are:
" (A) When any land is required by the Central government that government are required to pay (i) cost of acquisition, if the land is occupied and market value of land, if the land belongs to the State government and (ii) capitalised value of land revenue at the assessment to the State government the loss of land revenue, as no land revenue can be recovered from the Central government.
(B) When any land is not required by the Central government for the purpose for which it was acquired, the State government are given the first option to take it back on payment of its market value. Should the State government exercise the option and pay the market value of the land then they are at liberty to dispose it of in such a manner as they deem fit. "
( 6 ) BY this letters Central government was informed that the land for the Bhilai Steel Plant might be classified in two categories namely land belonging to private persons and land belonging to State. It was brought to the notice of the Central government that the central government agreed to pay the cost of acquisition of land and that the Stategovernment was also entitled to claim the amount awarded, that is, market value plus 15% on account of compulsory nature of acquisition from the central government. It was further brought to the notice of the central government that the State government would be entitled to recover capitalised value of land revenue at 25 times the amount of land revenue in accordance to above 1925 rules.
( 7 ) REGARDING land which belonged to State government as per earlier agreement it was agreed to transfer such land free of cost.
( 8 ) WE may like to quote paragraph 10 of the said letter which is as follows:
"the State government are, therefore, of the
