IMPORTANT POINT
The central legal point established in the judgment is the statutory power of the Central Government to impose conditions for diversion of forest land under the Forest (Conservation) Act, 1980, and the precedence of Rules over guidelines framed under the Act.

JUDGMENT

ALOK ARADHE, CJ. - Mr. M. Sudershan, learned Government Pleader for Forests appears for the appellants in W.A.No.708 of 2006 and respondent Nos.1 to 4 in W.A.No.927 of 2010. Ms. G. Sudha, learned Standing Counsel for National Thermal Power Corporation Limited appears for respondent No.1 in W.A.No.708 of 2006 and the appellant in W.A.No.927 of 2010. Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India appears for Union of India.

2. W.A.No.708 of 2006 has been filed by the erstwhile Government of Andhra Pradesh whereas W.A.No.927 of 2010 has been filed by National Thermal Power Corporation Limited (hereinafter referred to as 'the Corporation'). Since both these appeals emanate from an order dtd. 5/4/2006 passed by the learned Single Judge in Writ Petition No.12512 of 1992, the same were heard together and are being decided by this common judgment.

3. For the sake of convenience, the parties shall be hereinafter referred to as they are arrayed in the Writ Petition.

4. The Corporation is a Government Company within the meaning of Sec. 617 of the Companies Act, 1956. The Corporation is engaged in the business of generation of electricity. The Corporation needed large extent of land for setting up of a power generating station. One of the requirements of the thermal power plant was establishment of an ash pond to minimize the air pollution, which is generated on account of burning of the coal in the plant.

5. The Corporation therefore approached the erstwhile Government of Andhra Pradesh for allotment of land for construction of the ash pond. Thereupon, the erstwhile Government of Andhra Pradesh by G.O.Ms.No.1926 dtd. 31/12/1979 alienated the land measuring Acs.115.01 guntas in Survey Nos.1/2, 13, 14 and 22 situate at Mogalpahad Village, Peddapalli Taluk, Karimnagar District, in favour of the Corporation, for a consideration of Rs.1,15,025.00. Thereafter, by another G.O.Ms.No.1340 dtd. 3/4/1980, the land measuring Acs.590.00 in Survey Nos.360, 369, 431, 453, 479, 483, 486, 465, 469, 472, 484 and 378 situate at Kundanapalli Village, Peddapalli Taluk, Karimnagar District, was alienated in favour of the Corporation subject to payment of market value of Rs.6,00,925.00 and also S.D. fees, demarcation charges, S.V. and Tree value and Land Revenue.

6. The Forest (Conservation) Act, 1980 (hereinafter referred to as 'the 1980 Act') was enacted with an object to provide for conservation of forests and for matters connected therewith or ancillary or incidental thereto. The 1980 Act came into force with effect from 27/12/1980.

7. A notice dtd. 29/8/1986 was issued by the Forest Range Officer, Manthani, Karimnagar District, to the Officers of the Corporation on the ground that the Officers of the Corporation were interfering with the forest land. The erstwhile Government of Andhra Pradesh subsequently realized that part of the land in question allotted to the Corporation forms part of the reserved forest. Thereupon, the erstwhile Government of Andhra Pradesh sent a proposal for diversion of 152 hectares of forest land for construction of ash pond by the Corporation. The Central Government by an order dated 06/7/4/1988 had permitted for diversion of 152 hectares of forest land.

8. In the light of permission granted by the Central Government and in view of mandate contained in Sec. 2 of the 1980 Act, the erstwhile Government of Andhra Pradesh issued G.O.Ms.No.172 dtd. 25/5/1988 and permitted for diversion of the land subject to following conditions:

1. The National Thermal Power Corporation shall pay to the Forest Department the value of tree growth if any existing therein and also the capitalized value of the Forest land.

2. They shall also pay to the Forest Department the cost of felling, logging and transport of forest produce to the Forest Depots, if any;

3. The legal status of the land will remain unchanged.

4. No residential colonies or construction of buildings and roads will be allowed in the area.

5. They shall abide