TaxTMI 
TaxTMI 
2024 (9) TMI 1315
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................................................................................18 B. Return of acquired land under the 2013 Act ..........................25 C. Impugned Order of the High Court .....................................28 D. Role of the State under Article 300-A of the Constitution ............30 VIII. CONCLUSION ..............................................................37 1. Leave Granted. 2. This appeal arises from the order passed by the High Court of Himachal Pradesh at Shimla dated 12.07.2022 in Civil Writ Petition No. 2350/2018 filed by the Respondent Nos. 1 to 6 herein (original petitioners) by which the High Court allowed the writ petition and directed the Appellant herein to pay the requisite amount towards compensation as determined in the Supplementary Award dated 02.05.2022 passed by the Land Acquisition Collector, Arki ("LAC") (Respondent No. 10) in the first instance with liberty to recover the same from M/s Jaiprakash Associates Limited ("JAL") (Respondent No. 11) if permissible under the legal relationship between the two companies. I. FACTUAL MATRIX 3. The State of Himachal Pradesh (Respondent No. 7) issued a notification dated 2....
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....ehabilitation and Resettlement Act, 2013 (the "2013 Act") determining the compensation to the tune of Rs. 10,77,53,842.27/- (Rupees Ten Crore Seventy Seven Lakh Fifty Three Thousand Eight Hundred and Forty Two and Twenty Seven paisa Only) along with the incidental charges @ 2% amounting to Rs. 9,09,315.12/-. The LAC clarified in the award passed by him that the compensation amount towards the houses and other structures constructed prior to the date of notification under Section 4, whose survey was not allowed by the landowners during the acquisition proceedings would be considered in the supplementary award that may be passed separately after the reports regarding the valuation of structures were received. 8. The amount as determined under the Award dated 08.06.2018 was deposited by JAL and disbursed to the landowners. The possession certificate dated 07.06.2019 in respect of the subject land was issued in favour of JAL. Subsequently, the entries in the revenue record of the subject land in favour of JAL came to be mutated on 12.11.2020. 9. Being dissatisfied with the Award dated 08.06.2018, the Respondent Nos. 1- 6 herein filed writ petition no. 2350 of 2018 before the High....
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....e High Court examined the relationship between the Appellant and JAL and also referred to the Scheme for the purpose of determining the issue as to who should pay the compensation amount determined under the Supplementary Award to the Respondent Nos. 1-6 respectively. 14. On 12.07.2022, the High Court relying on Clause 7.1 of the Scheme, passed the impugned order, directing the Appellant to pay the compensation amount at the first instance and left it open for the Appellant to recover the same from JAL later, if permissible in law. 15. In view of the aforesaid, the Appellant is before this Court with the present appeal. II. SUBMISSIONS ON BEHALF OF THE APPELLANT 16. Mr. Navin Pahwa, the learned senior counsel appearing for the Appellant made the following submissions: a. The High Court, in its impugned order, erred in directing the Appellant to pay the compensation amount determined under the Supplementary Award because the initial Award dated 08.06.2018 as well as the Supplementary Award dated 02.05.2022 were passed by the LAC fixing the liability to pay compensation on JAL. b. The High Court failed to consider that under the Scheme between the Appell....
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....g entity and the High Court had erred in understanding that JAL stood merged or transferred with the Appellant. f. Mr. Pahwa also brought our attention to the order passed by this Court dated 16.12.2019 in Ultratech Cement Ltd. v. Tonnu Ram, SLP (C) (Diary) No. 42997 of 2019 wherein this Court clarified that the impugned judgment of the High Court of Himachal Pradesh could not have been construed as permitting third party to pursue claim for recovery against the Appellant in disregard of the Scheme and the executing court would be duty-bound to examine the purport of the Scheme and pass orders strictly in consonance therewith. The relevant observations made by this Court in Tonnu Ram (supra) are reproduced below: "...It cannot be construed as permitting third party to pursue claim for recovery against the petitioner in disregard of the scheme of arrangement propounded by the NCLT in respect of respondent No.4- M/s. Jaiprakash Industries. Despite this clear position, if any third party intends to pursue remedy against the petitioner, the Executing Court would be duty bound to examine the purport of the stated scheme propounded by the NCLT and pass....
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....nd JAL are trying to escape from their legal obligation and liability to pay the compensation amount as determined under the Supplementary Award to the Respondents and are in collusion with each other creating an inter-se dispute with the intention of depriving the original landowners of their legitimate right to receive compensation due to them. e. The subject land was acquired for public purpose and was being utilized by the Appellant for its purposes. IV. SUBMISSIONS ON BEHALF OF THE RESPONDENT NO. 10 18. Mr. Puneet Rajta, the learned Additional Advocate General appearing for the Respondent No. 10 i.e., the Land Acquisition Collector, Arki made the following submissions: a. The subject land was acquired in the year 2018 for providing a safety zone to the cement plant which had already been taken over by the Appellant in the year 2016. b. The acquired land is being utilized by the Appellant as a safety zone for the cement plant being run by them. However, the land is recorded in the name of JAL. c. The role of the State was limited to the extent of initiating the acquisition proceedings and as per the MOU signed with the Government of Him....
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....land was acquired for the purpose of safety zone for the said project, the Appellant cannot say that they never had any need for this particular land. c. Although the State Government had handed over the symbolic possession of the subject land in favour of JAL on 07.06.2019 yet the physical possession of this land remained with the villagers/landowners including Respondent Nos. 1-6 who had illegally occupied the subject land and had constructed houses/structures on the same even after the deliverance of the Award dated 08.06.2018 and the Supplementary Award dated 02.05.2022. d. It was submitted that the substantial delay in the issuance of the Award by the LAC had frustrated the purpose of acquisition for JAL. Since the entire project has been under the custody and possession of the Appellant, it is the appropriate party to address the issue of the requirement of the subject land for the purpose of Mining Activities & Safety Zone. If the Appellant is not interested in the subject land, then the same should be returned to the original landowners (Respondent Nos. 1-6 herein) and the amount deposited as an award of Rs. 10,77,53,842/- in the year 2018 should be refund....
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.... the following questions need to be looked into: i. Whether the dispute pertaining to payment of the requisite amount under the Supplementary Award arose before or after the "Effective Date" fixed in the Scheme? ii. Whether the subject land is an integral part of the cement project and the liability of paying compensation under the Supplementary Award for the said land can be imposed on the Appellant despite the said land not being in its name? 22. Clause 1.1 (o) defines the "Effective Date" as the date on which the Scheme becomes effective in accordance with its terms, which shall be the Closing Date [defined in Clause 1.1(k) and Clause 10.1]. The said date was decided to be 29.06.2017 among the parties. 23. Clause 1.1(w) defines the business and assets transferred by JAL to the Appellant. The definition of the same is reproduced below: "...(w) "JAL Business" means the business of manufacturing, sale and distribution of cement and clinker manufactured at the JAL Cement Plants, including all rights to operate such business, its movable or immovable assets, captive power plants, DG sets, coal linkages, rights, privileges, liabilities, guarantees, lan....
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....4. The parties by way of Clause 1.1(w)(ix) agreed that all litigations pertaining to the business and assets being transferred to the Appellant that arose before or on the Closing Date would not be transferred to the Appellant and will remain with JAL. 25. The aforesaid aspect has been further elaborated under Clause 7 of the Scheme which is reproduced below: "7. LEGAL PROCEEDINGS 7.1 All legal or other proceedings (whether civil or criminal, including before any statutory or judicial or quasi-judicial authority or tribunal) by or against the Transferor1 and /or the Transferor2, initiated on or arising and pending before the Effective Date, and relating to the JAL Business and the JCCL Business shall remain with the Transferor1 and/or the Transferor2, as the case may be. 7.2 In the event any case or matter pertaining to contingent liabilities being in the nature of disputed claims, not crystallized on the Closing Date or guarantees listed in Schedule III A and Schedule XI A or any similar instrument by whatsoever name called which have been advance against disputes related to the JAL Business or the JCCL Business existing on the Closing Date, or pertai....
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....he subject land was acquired under the compulsory provisions of the 1894 Act to provide a safety zone for the cement plant and mining areas. Therefore, the land was acquired in connection with the JAL Business. The acquisition proceedings began with the notification issued under Section 4 dated 25.07.2008 which was stayed by the High Court of Himachal Pradesh on 14.12.2011. After the disposal of the writ petitions filed by the original landowners, the operation of the stay on the acquisition proceedings came to an end on 23.06.2016. As the next step towards the proceedings, an Award dated 08.06.2018 was passed. The facts indicate that the land acquisition proceedings had commenced before the Effective Date of the Scheme (i.e. 29.06.2017) and the compensation remained undetermined as on the Effective Date. To our understanding, these facts attract the application of Clause 7.1 of the Scheme as the acquisition proceedings and the liability to pay compensation associated with it squarely falls within the meaning of 'other proceedings' as intended by the parties under the said Clause. 28. JAL has also not disputed that it had made payment of the amount determined under the Award of ....
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....al to the cement project is rejected. B. Return of acquired land under the 2013 Act 33. It is the case of JAL that the substantial delay in acquisition of the subject land has frustrated its purpose, and it could not make any use of the land. It was submitted that if the Appellant does not require the said land, then it should be returned to the original landowners and the amount of Rs. 10,77,53,842/- paid under the Award of 2018 should be refunded to JAL. 34. The return of acquired land is governed by Section 101 of the 2013 Act which is reproduced below : "101. Return of unutilised land.- When any land acquired under this Act remains unutilised for a period of five years from the date of taking over the possession, the same shall be returned to the original owner or owners or their legal heirs, as the case may be, or to the Land Bank of the appropriate Government by reversion in the manner as may be prescribed by the appropriate Government. Explanation.-For the purpose of this section, "Land Bank" means a governmental entity that focuses on the conversion of Government owned vacant, abandoned, unutilised acquired lands and tax-delinquent properties into....
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....s. JAL cannot pray for return of the land as that would result in endangering the lives and property of the original landowners. We find that the subject land has been in use all throughout the operation of the cement project by serving as a safety zone and the condition of being unutilized is not satisfied. 39. It is not in dispute that the Supplementary Award had to be passed as the compensation for standing crops, structures and other damages for the subject land which could not be fixed and evaluated under the Award No. 1 dated 08.06.2018. The same was also recorded in the Award of 2018. We find that the passing of Supplementary Award was not a fresh exercise but rather a continuation/extension of the Award of 2018. Therefore, when JAL has already paid the compensation amount as determined under the previous Award without any demur, it cannot be allowed to question its liability under the Supplementary Award and make a plea for return of the land at this stage on the ground that the purpose of the land is frustrated due to delay in acquisition proceedings. 40. At this stage, it is necessary for us to discuss the purport of Section 101 of the 2013 Act. The instant section ....
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.... held that it would be open to the Appellant to take support of the relevant provisions of the Scheme in support of the argument that the liability to pay the dues remains with JAL as per the stated scheme. D. Role of the State under Article 300-A of the Constitution 43. The Right to Property in our country is a net of intersecting rights which has been explained by this Court in Kolkata Municipal Corporation & Anr. v. Bimal Kumar Shah & Ors., 2024 SCC OnLine SC 968. A division bench of this Court identified seven non-exhaustive sub-rights that accrue to a landowner when the State intends to acquire his/her property. The relevant observations of this Court under the said judgment are reproduced below: "...27. ... Seven such sub-rights can be identified, albeit non - exhaustive. These are: i) duty of the State to inform the person that it intends to acquire his property - the right to notice, ii) the duty of the State to hear objections to the acquisition - the right to be heard, iii) the duty of the State to inform the person of its decision to acquire - the right to a reasoned decision, iv) the duty of the State to demonstrate that the acquisition is for pu....
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....ch obligations under the garb of industrial development, is not permissible for any welfare State as that would tantamount to uprooting a person and depriving them of their constitutional/human right. 47. That time is of the essence in determination and payment of compensation is also evident from this Court's judgment in Kukreja Construction Company & Ors. v. State of Maharashtra & Ors., 2024 SCC OnLine SC 2547 wherein it has been held that once the compensation has been determined, the same is payable immediately without any requirement of a representation or request by the landowners and a duty is cast on the State to pay such compensation to the land losers, otherwise there would be a breach of Article 300-A of the Constitution. 48. In the present case, the Government of Himachal Pradesh as a welfare State ought to have proactively intervened in the matter with a view to ensure that the requisite amount towards compensation is paid at the earliest. The State cannot abdicate its constitutional and statutory responsibility of payment of compensation by arguing that its role was limited to initiating acquisition proceedings under the MOU signed between the Appellant, JAL and....
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....ided within a period of eighteen months from the date of the award: Provided further that in case of acquisition of land for irrigation or hydel project, being a public purpose, the rehabilitation and resettlement shall be completed six months prior to submergence of the lands acquired..." [ Emphasis supplied ] 52. A bare reading of Section 38 as reproduced above indicates that the payment of full and final compensation to the land owners is a precursor to taking possession of the land sought to be acquired from such persons. It is clear from the facts that the acquisition proceedings herein failed to confirm to this statutorily mandated sequence of events. It is regrettable that the State of Himachal Pradesh, being a welfare state, did not ensure payment of compensation to the Respondent Nos. 1-6 before taking possession of their land. In fact, the landowners had to approach the High Court to seek directions to the LAC for passing of the supplementary award which was finally passed on 02.05.2022 that is, after a period of almost four years from the date of passing of the Award of 2018. 53. Further, the acquisition proceedings for the subject land had commenced vide ....