Rehabilitation policy limits agricultural land allotment, excludes separate claims by major sons, and permits withdrawal of acquisition for unused land.

A rehabilitation policy for displaced families must be applied according to its text and practical limits: agricultural land is to be provided only where possible, with genuine State efforts to secure suitable land or assist in purchase, but the policy cannot be expanded by implication. Major sons of oustees were not treated as separate displaced families for separate agricultural allotment. The Narmada Water Disputes Tribunal Award did not extend to the Omkareshwar Project, and the landless labourer condition in the clearance did not create an independent right to agricultural land. The State could also abandon acquisition under Section 48 for the agricultural land because possession had not been taken, while the dwelling units on the land remained entitled to rehabilitation under the policy.

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Issues: (i) Whether the rehabilitation policy required allotment of agricultural land to displaced families and whether major sons of the oustees were entitled to be treated as separate families for that purpose; (ii) Whether landless labourers and the oustees of the Omkareshwar Project could claim the benefit of the Narmada Water Disputes Tribunal Award; (iii) Whether the State could withdraw the acquisition proceedings in respect of the 284.03 hectares in the five villages under Section 48 of the Land Acquisition Act, 1894, while continuing rehabilitation for the dwelling units.

Issue (i): Whether the rehabilitation policy required allotment of agricultural land to displaced families and whether major sons of the oustees were entitled to be treated as separate families for that purpose.

Analysis: The rehabilitation policy was held to require allotment of agricultural land to displaced families only to the extent it was possible and subject to availability, with the State being obliged to make genuine efforts to provide land or assist in purchase of suitable land. At the same time, the Court distinguished compensation from rehabilitation and held that rehabilitation could not be expanded by adding categories not contemplated by the policy. On a close reading of the policy, the definition of displaced family did not justify treating every major son as an independent family for allotment of agricultural land. The earlier understanding that major sons had such an entitlement was found to rest on an erroneous assumption about the Tribunal award and could not be perpetuated.

Conclusion: The State was required to provide land relief to eligible displaced families as far as possible, but major sons were not entitled to separate allotment of agricultural land as independent families.

Issue (ii): Whether landless labourers and the oustees of the Omkareshwar Project could claim the benefit of the Narmada Water Disputes Tribunal Award.

Analysis: The Tribunal Award was confined to the Sardar Sarovar Project and the water dispute between the riparian States. It did not create a general entitlement applicable to the Omkareshwar Project. The environmental clearance condition referring to landless labourers was read as being subject to law and the State policy, and did not confer an independent right to agricultural land. The rehabilitation package for landless persons contemplated financial assistance and related benefits, not a mandatory right to agricultural land. Therefore, neither the Award nor the clearance condition could be used to enlarge the policy beyond its text.

Conclusion: Landless labourers were not entitled to mandatory allotment of agricultural land, and the Tribunal Award did not apply to the Omkareshwar Project.

Issue (iii): Whether the State could withdraw the acquisition proceedings in respect of the 284.03 hectares in the five villages under Section 48 of the Land Acquisition Act, 1894, while continuing rehabilitation for the dwelling units.

Analysis: The Court found, on the basis of the local inspection report and technical material, that the disputed agricultural lands would only face temporary submergence for a short duration due to backwater effect and were not required to be compulsorily acquired. It also found that actual physical possession of the land had not been taken by the State and that revenue entries alone did not establish vesting. In those circumstances, the State retained the power to abandon the acquisition. However, the 167 dwelling units on the land stood on a different footing and remained entitled to rehabilitation benefits under the policy.

Conclusion: The State was entitled to abandon the acquisition proceedings for the agricultural land, but the dwelling units had to be dealt with under the rehabilitation policy.

Final Conclusion: The judgment substantially upheld the State's challenge on the main rehabilitation issues while preserving relief for eligible displaced families and occupants of dwelling units, and it limited the scope of land-for-land rehabilitation to the extent permitted by the policy and the facts found on record.

Ratio Decidendi: A rehabilitation policy must be applied according to its text and practical limits, and courts cannot enlarge entitlements by implication, especially where the claimed benefit is not supported by the governing policy or the applicable statutory scheme.

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