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2023 Supreme(SC) 353

SUPREME COURT OF INDIA
M.R. SHAH, KRISHNA MURARI, JJ.
Anil Agarwal Foundation Etc. Etc. – Appellant
Versus
State of Orissa and Ors. – Respondents
Civil Appeal Nos. 1144-1146 of 2011 With Civil Appeal Nos. 1148-1150 of 2011, Civil Appeal Nos. 1152-1154 of 2011, Civil Appeal Nos. 1161-1169 of 2011
Decided on : 12-04-2023

Advocates appeared:
For the Parties : Mr. P. S. Sudheer, AOR Mr. Abhisth Kumar, AOR Mr. Prashant Bhushan, Adv. Mr. Pranav Sachdeva, Adv. Mr. Chinamaya Mishra, Adv. Mr. Ajit Pudussery, AOR Mr. Milind Kumar, AOR Mr. Rutwik Panda, AOR Ms. Nikhar Berry, Adv. Ms. Anshu Malik, Adv. Mr. Raj Kumar Mehta, AOR Mr. Arvind Kumar Sharma, AOR Ms. Ruchi Kohli, AOR Mr. Shibashish Misra, AOR

Headnote:(A) Land Acquisition Act, 1894 - Sections 4(1), 5A, 6, 39, 41, 44B - High Court quashed acquisition proceedings due to violations of procedural requirements and lack of public purpose - Acquisition not valid as land was acquired in favor of a private company lacking proper legal status - Violation of rule of law and public trust doctrine identified. (Paras 8.7, 8.15, 8.22)

(B) Public Interest Litigation - Maintainability recognized for affected landowners and marginalized groups - Court's duty to protect rights and interests of disadvantaged persons emphasized. (Paras 8.22, 8.23)

Facts of the case:
Acquisition of approximately 6000 acres of agricultural land for establishment of a university by a private foundation involved serious public interest and procedures were not followed properly - Original landowners and public interest litigants challenged the acquisition based on non-compliance with the Act’s provisions.

Findings of Court:
Entire acquisition process quashed for non-compliance with statutory provisions, and arbitrary actions leading to potential injustice to landowners and local community rights recognized.

Issues: Whether the acquisition followed due process and served a legitimate public purpose; whether the private company's status allowed such acquisition under the Law; whether proper inquiries and consultations were performed.

Ratio Decidendi: The court affirmed the mandatory nature of compliance with procedural requirements under the Land Acquisition Act and recognized the role of public interest litigation in safeguarding rights of marginalized groups.

Result: Appeals dismissed, acquisition proceedings quashed and costs imposed.

Judgement Key Points

Key Points: - Supreme Court dismissed appeals, upholding High Court order quashing land acquisition proceedings for ~6000 acres in favor of Anil Agarwal Foundation due to non-compliance with Land Acquisition Act, 1894 and rules (!) (!) (!) - Acquisition initiated by private company (Vedanta/Anil Agarwal Foundation) identifying land, with MoU signed on 19.07.2006 when it was private, violating Section 44B (!) (!) (!) (!) (!) - No proper Land Acquisition Committee under Rule 3; Core Committee not substitute; no inquiry/report under Rule 4 on suitability, negotiations, excessiveness (!) (!) (!) - Beneficiary not valid public company; conversion from Section 25 private limited by guarantee lacked compliance with Companies Act sections like 23, 31 (!) (!) (!) - Section 6 declarations issued without Section 41 agreement or Rule 4(4) compliance; notifications violated Sections 39, 40 (!) (!) (!) - PIL maintainable for marginalized landowners (6000 families, 30,000 affected); public interest due to environmental impact near Wildlife Sanctuary, rivers under public trust (!) (!) (!) (!) - State offered undue favors/largesse to company (tax exemptions, autonomy, infrastructure); arbitrary, violative of Article 14 (!) (!) (!) - Non-application of mind on environmental aspects (rivers Nuanai/Nala, proximity to Balukhand Sanctuary); affects ecology, public trust doctrine (!) (!) (!) - High Court findings on 15 issues affirmed; entire proceedings vitiated from initiation, including awards, possession (!) (!) (!) - Costs of Rs. 5 lakhs imposed on Anil Agarwal Foundation (!)

What is the status of Anil Agarwal Foundation as a public company under the Companies Act, 1956 for land acquisition purposes? [p_121][p_159]

Whether the State Government can acquire land under Part VII of the Land Acquisition Act, 1894 for a private company in favor of establishing a non-existent university? [p_123][p_164]

Whether the acquisition proceedings complied with mandatory provisions of Sections 39, 40, 41 of the Land Acquisition Act, 1894 and Rules 3(2), 4 of Land Acquisition (Companies) Rules, 1963? [p_125][p_169]


Table of Content
1. introduction to the case and parties involved. (Para 1 , 2)
2. overview of the land acquisition request and agreement process. (Para 3)
3. arguments against high court’s decision and grounds for appeal. (Para 4)
4. arguments from the plaintiffs focusing on public interest. (Para 5)
5. judicial review of the land acquisition proceedings. (Para 6 , 8)
6. final decision and directives issued by the court. (Para 9)

JUDGMENT :

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 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 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 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 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 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. 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 postgraduate 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 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 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 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 incorporate

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