Government companies are excluded from the provisions of Part VII of the Land Acquisition Act, 1894, following the 1984 amendment, ensuring the validity of agreements under statutory rules.

JUDGMENT

This writ petition raises three important questions: (i) Whether in the light of the amendment to Part VII of the Land Acquisition Act, 1894 (for short 'the Act'), acquisition for a Government company is covered by the provisions of the said Part and an agreement executed between such a Government Company and the Government will be void; (ii) whether the agreement is violative of Section 20 of the Contract Act and if so, it is void; and (iii) whether the agreement could be saved in the light of Section 21 of the Contract Act.

2. The necessary facts for the disposal of the writ petition are the following: The petitioner is the ITI Limited, Bangalore, a Government of India company. For expanding the Palakkad Unit, the Company requested the Government of Kerala to acquire the property having 100 acres in extent in 1987. The request was considered under Part VII of the Act. Exts.P2 to P6 are the copies of awards passed in the land acquisition proceedings. The Company paid an amount of Rs.2.5 crores to satisfy the awards. On completion of the proceedings of acquisition Ext.P7 agreement was executed between the Company and the Government on 17.7.1987 imposing certain conditions. One of the important conditions therein is the clause regarding resumption in case of any failure on the part of the petitioner to carry on their obligation.

3. The main challenge is against Ext.P13 order by which an order of resumption has been passed resuming 77.80 acres of land unutilised by the Company. Ext.P14 is the covering letter served along with the same and forwarding a Demand Draft for an amount of Rs.1,70,47,790/-. Ext.P15 is the proceedings of the State Government conveying the decision to make available the land for starting a Medical College for the benefit of students from among Scheduled Castes and Scheduled Tribes and Ext.P16 is the communication issued by the Principal Secretary to the Government, Revenue Department requesting the District Collector to resume the said land from the Company. Pursuant to these orders, the above land has been taken possession.

4. In fact, even during earlier periods also there were communications proposing to resume the unutilised land. Ext.P8 is the notice issued by the District Collector dated 17.12.1997 conveying the decision of the Government to resume the same extent. This was replied by the Company as per Ext.P9 requesting that the order may be revoked, as the Company is proposing to fulfil certain development activities as per an action plan. Ext.P10 is produced to show that a draft rehabilitation scheme was sanctioned by the Government of India which has been submitted before the BIFR. The BIFR is yet to take a final decision in the matter. Ext.P11 is the representation submitted by the Company dated 27.10.2011 pointing out that the land will be required for implementing the various projects/expansion plans which will facilitate the revival of the Company.

5. Ext.P13 and its contents are therefore relevant to address the questions raised herein. It refers to the fact that out of the 100 acres of land in Yakkara Village acquired as per sanction order dated 3.3.1987 issued by the Government, 72.77 acres of land remains unutilised. After citing the earlier proceedings in the matter it is mentioned that sanction has been accorded for setting up of a Medical College in Palakkad District by the Government of Kerala. In the light of the agreement dated 17.7.1987 the Government has the right to resume the land if the petitioner Company does not use the land for the purpose for which it was acquired within a period of two years or such further extended period. It refers to the willingness expressed by the company to spare 50 acres of land for the establishment of a National Institute, viz. Indian Institute of Information Technology and Tele Communications to boost the educational and socio economic development in the district, provided appropriate compensation is paid to the company. Finally after me