The Gujarat (earlier ‘Bombay’ prior to the amendment in its application in the State of Gujarat) Tenancy and Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy Act, 1958 for short). - Sale of agricultural land with permission under sec.89 of Tenancy Act to the company Indigold to start industry - but the company not started industry even after 5 years - that company sold the same directly to another company for higher price with out permission -Govt. sanctioned permission for second sale also against the provisions of Act- Challenging Pil filed - High court dismissed the Pil - Apex court held that as per Act - the property vest in the Government as the first company failed to set up industry - but failed to resume the land after determining compensation - Private sale to Alumina company - was directly order to be accepted by the Ministry itslef but not by collector independently - High court failed to look in to all these aspects - Apex court set aside the order of high court and also set aside the orders of Govt. and collector orders sanctioning permission for second sale - The Apex court in the circumstances of the case directed the amount paid by Alumina to Indigold be adjusted as compensation - further directed the Alumina to pay 3.5 crores to the Govt. with in 3 months, and direct the govt. to sanction permission after that only =
The Writ Petition had various prayers, but essentially it sought
to challenge the permission granted by the Collector, Bhuj, to sell certain
parcels of agricultural land situated in district Kutch, which were said to
have been purchased earlier by the respondent No.4 herein, one Indigold
Refinery Limited of Mumbai, for industrial purpose in favour of respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being impermissible
under the provisions of the Gujarat (earlier ‘Bombay’ prior to the
amendment in its application in the State of Gujarat) Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy
Act, 1958 for short).
It was submitted that under Section 89A of this Act,
agricultural land can be permitted to be sold by an agriculturist to
another person for industrial purpose provided the proposed user is bona-
fide.
In the event, the land is not so utilised by such a person for such
purpose, within the period as stipulated under the act, the Collector of
the concerned district has to make an enquiry under sub-Section 5 thereof,
give an opportunity to the purchaser with a view to ascertain the factual
situation, and thereafter pass an order that the land shall vest in the
State Government on payment of an appropriate compensation to the purchaser
which the Collector may determine.
It was contended that there was no
provision for any further transfer of agricultural land from one industrial
purchaser to any third party, once again, for industrial purpose when the
first purchaser of agricultural land had defaulted in setting up the
industry.
Apart from being in breach of the law, the transaction was stated
to be against public interest, and a mala-fide one resulting into a serious
loss to the public exchequer.
The Writ Petition criticised the role of the
Collector and the Revenue Minister of the State Government, and sought an
inquiry against them in the present case, and also a direction to the state
authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ petition
on two grounds, firstly that there was delay in initiating the said Public
Interest Litigation (PIL), and that the writ petitioner had suppressed the
material facts before the Court concerning the investment claimed to have
been made by the respondent No.5.
4. The writ petition, and now this appeal raise the issues with
respect to the underlying policy and purpose behind the relevant provisions
of the Tenancy Act, 1958.
In that connection, it also raises the issue
with respect to the duties of the revenue officers on the spot, such as the
Collector, the importance of the role of senior administrative officers of
the State Government, and whether a Minister of the Government can direct
the administrative officers and the Collector to act contrary to the
provisions and policy of the statute. =
Chapter VIII of the Tenancy Act, 1958. The sections read as follows:-
“CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to (1) Save as provided in this Act,
non-agricul-
turists barred
a) no sale (including sales in execution of a decree of
a Civil Court or for recovery of arrears of land
revenue or for sums recoverable as arrears of land
revenue), gift exchange or lease of any land or
interest therein, or
b) no mortgage of any land or interest therein, in which
the possession of the mortgaged property is delivered
to the mortgagee,
shall be valid in favour of a person who is not an agriculturist
or who being an agriculturist cultivates personally land not
less than three family holdings whether as owner or partly as
tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the
State Government in this behalf may grant permission for such
sale, gift, exchange, lease or mortgage, in such circumstances
as may be prescribed:
[Provided further that no such permission shall be granted,
where land is being sold to a person who is not an
agriculturists for agricultural purpose, if the annual income of
such person from other source exceeds five thousand rupees.]
(2) Nothing in this section shall be deemed to prohibit the
sale, gift, exchange or lease of a dwelling house or the site
thereof or any land appurtenant to it in favour of an
agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any
land or interest therein effected in favour of a co-operative
society as security for the land advanced by such society.
(4) Nothing in section 90 shall apply to any sale made under
sub-section (I).
89A. Sale of land for bonafide industrial purpose
permitted in certain cases:-
(1) Nothing in section 89 shall prohibit the sale or the
agreement for the sale of land for which no permission is
required under sub-section (1) of section 65B of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879) in favour of any person for
use of such land by such person for a bonafides industrial
purpose:
Provided that—
a) the land is not situated within the urban agglomeration as
defined in clause (n) of section 2 of the Urban Land
(Ceiling and Regulation) Act, 1976 (33 of 1976),
b) where the area of the land proposed to be sold exceeds ten
hectares, the person to whom the land is proposed to be
sold in pursuance of this sub-section shall obtain previous
permission of the Industries Commissioner, Gujarat State,
or such other officer, as the State Government may, by an
order in writing, authorise in this behalf.
c) the area of the land proposed to be sold shall not exceed
four times the area on which construction for a bonafide
industrial purpose is proposed to be made by the purchaser:
Provided that any additional land which may be required for
pollution control measures or required under any relevant
law for the time being in force and certified as such by
the relevant authority under that law shall not be taken
into account for the purpose of computing four times the
area.
d) where the land proposed to be sold is owned by a person
belonging to the Scheduled Tribe, the sale shall be subject
to the provisions of section 73AA of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879).
2) Nothing in the Section 90 shall apply to any sale made in
pursuance of subsection (1).
3) (a) Where the land is sold to a person in pursuance of sub-
section (1) (hereinafter referred to as “the purchaser”),
he shall within thirty days from the date of purchase of
the land for bonafides industrial purpose, send a notice of
such purchase in such form alongwith such other particulars
as may be prescribed, to the Collector and endorse a copy
thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and
other particulars to the Collector under clause (a) within
the period specified therein, he shall be liable to pay, in
addition to the non-agricultural assessment leviable under
this Act, such fine not exceeding two thousand rupees as
the Collector may subject to rules made under this Act,
direct.
(c) Where, on receipt of the notice of the date or
purchase for the use of land for a bonafides industrial
purpose and other particulars sent by the purchaser under
clause (a), the Collector, after making such inquiry as he
deems fit—
(i) is satisfied that the purchaser of such land has
validly purchased the land for a bonafide industrial
purpose in conformity with the provisions of sub-section
(1), he shall issue a certificate to that effect to the
purchaser in such form and with in such time as may be
prescribed.
(ii) is not so satisfied, he shall, after giving the
purchaser an opportunity of being heard, refuse to issue
such certificate and on such refusal, the sale of land to
the purchaser shall be deemed to be in contravention of
section 89.
(d) (i) The purchaser aggrieved by the refusal to issue a
certificate by the Collector under sub-clause (ii) of
clause (c) may file an appeal to the State Government or
such officer, as it may, by an order in writing, authorise
in this behalf.
(ii) The State Government or the authorised officer shall,
after giving the appellant an opportunity of being heard,
pass such order on the appeal as it or he deems fit.
4) The purchaser to whom a certificate is issued under sub-
clause (i) of clause (c) of sub-section (3), shall commence
industrial activity on such land within three years from
the date of such certificate and commence production of
goods or providing of services within five years from such
date:
Provided that the period of three years or, as the case may be,
five years may, on an application made by the purchaser in that
behalf, be extended from time to time, by the State Government
or such officer, as it may, by an order in writing authorise in
this behalf, in such circumstances as may be prescribed.
(5) Where the Collector, after making such inquiry as he deems
fit and giving the purchaser an opportunity of being heard,
comes to a conclusion that the purchaser has failed to
commence industrial activity or production of goods or
providing of services within the period specified is clause
(b) of sub-section (4), or the period extended under the
proviso to that clause, the land shall vest in the State
Government free from all encumbrances on payment to the
purchaser of such compensation as the Collector may
determine, having regard to the price paid by the purchaser
and such land shall be disposed of by the State Government,
having regard to the use of land.”
Hence, the following decision:-
68. Having noted the legal position and the factual scenario, the
impugned judgment and order passed by the High Court will have to be set
aside. The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in law
for being in violation of the scheme and the provisions of Sections 89 and
89A of the Tenancy Act.
The direct sale of land by Indigold to Alumina is
also held to be bad in law, and inoperative.
69. (i) In normal circumstances, the order hereafter would have been
to direct the Collector to proceed in accordance with Section 89A(5) viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the industrial activity and the production of goods and
services within the period specified.
In the instant case, there is no
need of any such direction to hold an enquiry, in view of the letter of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii) Consequently, there will be an order that the land shall vest in the
State Government free from all encumbrances. This vesting order, however,
has to be on payment of appropriate compensation to the purchaser as the
Collector may determine.
In the instant case, there is no need of having
this determination, for the reason that Indigold has received from Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in 2003.
Neither Indigold nor
Alumina is making any grievance towards this figure or the payment thereof.
In fact, it is the case of both of them that the direct sale by Indigold
to Alumina for this amount as permitted by the State Government be held
valid.
That being so, this amount of Rs. 1.20 crores would be set-off
towards the compensation which would be payable by the State Government to
the purchaser Indigold, since the land was originally purchased by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed off
by the State Government, having regard to the use of the land.
The land
was supposed to be used for the industrial activity on the basis of the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed a
plant based on use of bauxite.
The disposal of the land will, however, have
to be at least as per the minimum price that would be receivable at the
Government rate.
In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5 has also offered to pay, without prejudice, the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores to
the State, the land will be permitted to be disposed of by the State
Government to Alumina provided Alumina pays this amount of Rs. 3.15 crores
to the State Government.
This particular order is being made having
further noted that, Alumina has acted on the basis of the commitment made
to it by the Government of Gujarat in the Vibrant Gujarat Summit, and in
furtherance of the industrial development policy of the State.
It is also
relevant to note that the respondent No.5 had made an application to the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four years.
Mr. Ahmadi,
learned senior counsel appearing for the appellants has also submitted
that, as such, appellants are not against the development of Kutch area,
but they do want the state to follow the law and exchequer not to suffer.
In the circumstances, although we do not approve the action of the State
Government, and hold it to be clearly arbitrary and untenable, we are of
the view that the aforesaid order will be appropriate to do complete
justice in the matter.
70. In the circumstances, we pass the following orders:-
(a) The appeal is allowed in part;
(b) The impugned judgment and order passed by the High Court is set-
aside;
(c) The PIL No.44 of 2012 filed by the appellants is allowed by holding
that the order dated 18.12.2009 passed by the Government of Gujarat and by
the Collector of Kutch on 15.1.2010, are held to be arbitrary and bad in
law;
(d) In the facts and circumstances of this case, the sale of the
concerned land by Indigold to Alumina is held to be bad in law. The land
involved in the present case is held to have vested in the State of Gujarat
free from all encumbrances, and the amount of Rs. 1.20 crores paid by
Alumina to Indigold is treated as full payment towards the compensation
payable by the State to Indigold.
(e) If Alumina is interested in their proposed project, it shall pay an
amount of Rs. 3.15 crores to the Government of Gujarat within three months
hereafter. On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government. The further activities
of Alumina on the concerned parcel of land will start only after this
payment is made, and in the event the amount is not so paid within three
months hereafter, the Government will proceed to take further steps to
dispose of the land having regard to the use of the land.
(f) In the facts of the present case, there shall be no order as to
costs.
2014 ( January - Vol - 1) Judis.nic.in/ S.C./ file name =41172
H.L. GOKHALE, J. CHELAMESWAR
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL N. 836 OF 2014
(@ out of SPECIAL LEAVE PETITION (CIVIL) NO.36738/2012)
Dipak Babaria & Anr. … Appellants
Versus
State of Gujarat & Ors. … Respondents
J U D G E M E N T
H.L. Gokhale J.
Leave Granted.
2. This appeal by Special Leave seeks to challenge the judgment
and order dated 30.8.2012 rendered by a Division Bench of the Gujarat High
Court dismissing Writ Petition (PIL) No.44 of 2012 filed by the appellants
herein.
The Writ Petition had various prayers, but essentially it sought
to challenge the permission granted by the Collector, Bhuj, to sell certain
parcels of agricultural land situated in district Kutch, which were said to
have been purchased earlier by the respondent No.4 herein, one Indigold
Refinery Limited of Mumbai, for industrial purpose in favour of respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being impermissible
under the provisions of the Gujarat (earlier ‘Bombay’ prior to the
amendment in its application in the State of Gujarat) Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy
Act, 1958 for short).
It was submitted that under Section 89A of this Act,
agricultural land can be permitted to be sold by an agriculturist to
another person for industrial purpose provided the proposed user is bona-
fide.
In the event, the land is not so utilised by such a person for such
purpose, within the period as stipulated under the act, the Collector of
the concerned district has to make an enquiry under sub-Section 5 thereof,
give an opportunity to the purchaser with a view to ascertain the factual
situation, and thereafter pass an order that the land shall vest in the
State Government on payment of an appropriate compensation to the purchaser
which the Collector may determine.
It was contended that there was no
provision for any further transfer of agricultural land from one industrial
purchaser to any third party, once again, for industrial purpose when the
first purchaser of agricultural land had defaulted in setting up the
industry.
Apart from being in breach of the law, the transaction was stated
to be against public interest, and a mala-fide one resulting into a serious
loss to the public exchequer.
The Writ Petition criticised the role of the
Collector and the Revenue Minister of the State Government, and sought an
inquiry against them in the present case, and also a direction to the state
authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ petition
on two grounds, firstly that there was delay in initiating the said Public
Interest Litigation (PIL), and that the writ petitioner had suppressed the
material facts before the Court concerning the investment claimed to have
been made by the respondent No.5.
4. The writ petition, and now this appeal raise the issues with
respect to the underlying policy and purpose behind the relevant provisions
of the Tenancy Act, 1958.
In that connection, it also raises the issue
with respect to the duties of the revenue officers on the spot, such as the
Collector, the importance of the role of senior administrative officers of
the State Government, and whether a Minister of the Government can direct
the administrative officers and the Collector to act contrary to the
provisions and policy of the statute.
The Secretary of the Department of
Revenue of the Government of Gujarat, and the Collector of District Kutch
at Bhuj are joined as respondent Nos. 2 and 3 to this appeal.
The facts leading to this appeal are as follows:-
5. It is pointed out by the appellants that the respondent No.4
Indigold Refinery Ltd. (Indigold for short) which is a company having its
office in Mumbai, purchased eight parcels of land owned by one Virji Jivraj
Patel and Jayaben Virji Patel residing at Bankers Colony, Bhuj, admeasuring
in all 39 acres and 25 gunthas (i.e. roughly 40 acres) by eight sale deeds
all dated 30.1.2003, for a consideration of about Rs.70 lakhs.
These eight
sale deeds are supposed to have been signed for respondent No.4 Indigold by
one Hanumantrao Vishnu Kharat, its Chairman-cum-Managing Director. The
lands are situated in villages Kukma and Moti Reldi in the district of
Kutch.
The sale deeds indicated that the purchaser had purchased these
lands for industrial purpose, and that the purchaser will obtain the
permission from the Deputy Collector, Bhuj for purchasing the said land
within one month from the date of those sale deeds.
The respondent No.4 is
said to have applied for the necessary permission under Section 89A of the
Tenancy Act, 1958 on 31.1.2003, and the Collector of Bhuj is stated to have
given the requisite certificate of purchase of the lands under sub-section
(3) (c) (i) of the said section.
It appears that thereafter no steps were
taken by respondent No.4 to put up any industry on the said land.
6. Five years later, the respondent No.4 is stated to have applied
on 6.12.2008 to the Deputy Collector at Bhuj for permission to sell these
lands. The Collector of Bhuj sought the guidance from the Revenue
Department, and in view of the direction of the Revenue Department, the
Deputy Collector granted the permission on 15.1.2010, to sell the lands to
respondent No. 5 treating it as a special case, and not to be treated as a
precedent.
Thereafter, the respondent No.4 conveyed the concerned lands to
respondent No.5 by sale deed dated 19.1.2010. Respondent No.5 also obtained
permission from the Industries Commissioner on 8.3.2010 for putting up the
industry. Subsequently, the Collector issued the certificate as required
under Section 89A (3) (c) (i) of the Tenancy Act, 1958, on 21.5.2010, that
respondent No.5 had purchased the land for a bona-fide purpose.
The
permission for a non-agricultural user was given to the respondent No.5 on
5.1.2011.
The Gujarat Mineral Development Corporation (GMDC) – which got
itself impleaded in this appeal as respondent No.6 has entered into a
Memorandum of Understanding (MOU for short) on 30.11.2011 with M/s Earth
Refinery Pvt. Ltd. which is the holding company of respondent No.5 to
purchase 26% of equity in a joint venture company to be set up by them, and
which will own the industry.
7. It appears that a Gujarati Daily “Sandesh” in an article dated
20.8.2011 reported that there was a huge loss to the State exchequer in the
sale of these lands to a private company almost to the tune of Rs.250
crores.
The newspaper reported that although the respondent No.4 had
purchased the concerned lands at village Kukma and Moti Reildi on
30.1.2003, no industrial activity was started till 2008 as required by the
law, and after a long period of five years the land was to be sold to
Alumina Refinery Limited (Alumina for short).
One Mr. Nitin Patel is the
Managing Director of this Alumina, and Mr. Nilesh Patel who is his brother
is its Director (Legal and Human Resources).
The newspaper stated that
Alumina had written a letter to the Chief Minister Mr. Narendra Modi, on
18.6.2009 that the Government should grant the necessary permission. It is
further stated that on the said proposal being placed before them, the
officers of the Revenue Department had placed negative remarks, and yet a
permission was granted to sell 2 lakh sq. yds. of land at a throw away
price when the rate of land was Rs.3500 – 4000 per sq. yd.. It was alleged
that there was a direct involvement of the Chief Minister in this scam, and
with a view to avoid Lokayukata enquiry, although a commission was
appointed under Hon’ble Mr. Justice M.B. Shah, a former Judge of Supreme
Court of India to enquire into a number of other controversial projects,
this scam was excluded therefrom.
8. There was also a news item in another Daily “Kachchh Mitra” on
1.2.2011 that the Alumina Refinery Limited was given permission by
breaching rules and regulations. The farmers of the nearby villages were
worried, and some 200 farmers had protested against the proposal as it
would affect their agricultural activities due to pollution. It was stated
that they had sowed plants of tissue-culture Israeli dry-dates. They had
planted lacs of Kesar Mango trees. They were also cultivating crops of
Papaiya, Aranda, Wheat, Cotton, groundnuts etc. If the refinery work
starts in this area, it will affect the agricultural work badly. There was
also a fear that the blackish and toxic air of the factory will spoil the
plants.
9. All this led the appellants to file the earlier mentioned writ
petition, for the reliefs as prayed. The petition enclosed the above
referred news reports, as also the information obtained through enquiry
under the Right to Information Act, 2005 by one Shri Shashikant Mohanlal
Thakker of Madhapur Village of Taluka Bhuj. This information contained the
documents incorporating the file notings of the revenue department and the
orders granting permission. The aforesaid writ petition was filed on
28.2.2012. An affidavit in reply to the writ petition was filed by above
referred Nitin Patel on behalf of respondent No.5, and the appellants filed
a rejoinder. Respondent No.5 filed a sur-rejoinder thereto. The respondent
No.1 State of Gujarat filed an affidavit in reply on 16.8.2012, and the
petitioner filed a rejoinder to the Government’s affidavit on 10.11.2012.
After the writ petition was filed on 28.2.2012 an order of status-quo was
granted on 1.3.2012, and it continued till the dismissal of the petition on
30.8.2012 when the order of stay was vacated. However, when the present
SLP was filed, an order of status-quo was granted by this Court on
4.1.2013, and it has continued till date.
Relevant provisions of the Statute:-
10. In as much as we are concerned with the provisions contained in
Section 89 and Section 89A of the Tenancy Act, 1958, it is necessary to
reproduce the two sections in their entirety. These two sections appear in
Chapter VIII of the Tenancy Act, 1958. The sections read as follows:-
“CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to (1) Save as provided in this Act,
non-agricul-
turists barred
a) no sale (including sales in execution of a decree of
a Civil Court or for recovery of arrears of land
revenue or for sums recoverable as arrears of land
revenue), gift exchange or lease of any land or
interest therein, or
b) no mortgage of any land or interest therein, in which
the possession of the mortgaged property is delivered
to the mortgagee,
shall be valid in favour of a person who is not an agriculturist
or who being an agriculturist cultivates personally land not
less than three family holdings whether as owner or partly as
tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the
State Government in this behalf may grant permission for such
sale, gift, exchange, lease or mortgage, in such circumstances
as may be prescribed:
[Provided further that no such permission shall be granted,
where land is being sold to a person who is not an
agriculturists for agricultural purpose, if the annual income of
such person from other source exceeds five thousand rupees.]
(2) Nothing in this section shall be deemed to prohibit the
sale, gift, exchange or lease of a dwelling house or the site
thereof or any land appurtenant to it in favour of an
agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any
land or interest therein effected in favour of a co-operative
society as security for the land advanced by such society.
(4) Nothing in section 90 shall apply to any sale made under
sub-section (I).
89A. Sale of land for bonafide industrial purpose
permitted in certain cases:-
(1) Nothing in section 89 shall prohibit the sale or the
agreement for the sale of land for which no permission is
required under sub-section (1) of section 65B of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879) in favour of any person for
use of such land by such person for a bonafides industrial
purpose:
Provided that—
a) the land is not situated within the urban agglomeration as
defined in clause (n) of section 2 of the Urban Land
(Ceiling and Regulation) Act, 1976 (33 of 1976),
b) where the area of the land proposed to be sold exceeds ten
hectares, the person to whom the land is proposed to be
sold in pursuance of this sub-section shall obtain previous
permission of the Industries Commissioner, Gujarat State,
or such other officer, as the State Government may, by an
order in writing, authorise in this behalf.
c) the area of the land proposed to be sold shall not exceed
four times the area on which construction for a bonafide
industrial purpose is proposed to be made by the purchaser:
Provided that any additional land which may be required for
pollution control measures or required under any relevant
law for the time being in force and certified as such by
the relevant authority under that law shall not be taken
into account for the purpose of computing four times the
area.
d) where the land proposed to be sold is owned by a person
belonging to the Scheduled Tribe, the sale shall be subject
to the provisions of section 73AA of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879).
2) Nothing in the Section 90 shall apply to any sale made in
pursuance of subsection (1).
3) (a) Where the land is sold to a person in pursuance of sub-
section (1) (hereinafter referred to as “the purchaser”),
he shall within thirty days from the date of purchase of
the land for bonafides industrial purpose, send a notice of
such purchase in such form alongwith such other particulars
as may be prescribed, to the Collector and endorse a copy
thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and
other particulars to the Collector under clause (a) within
the period specified therein, he shall be liable to pay, in
addition to the non-agricultural assessment leviable under
this Act, such fine not exceeding two thousand rupees as
the Collector may subject to rules made under this Act,
direct.
(c) Where, on receipt of the notice of the date or
purchase for the use of land for a bonafides industrial
purpose and other particulars sent by the purchaser under
clause (a), the Collector, after making such inquiry as he
deems fit—
(i) is satisfied that the purchaser of such land has
validly purchased the land for a bonafide industrial
purpose in conformity with the provisions of sub-section
(1), he shall issue a certificate to that effect to the
purchaser in such form and with in such time as may be
prescribed.
(ii) is not so satisfied, he shall, after giving the
purchaser an opportunity of being heard, refuse to issue
such certificate and on such refusal, the sale of land to
the purchaser shall be deemed to be in contravention of
section 89.
(d) (i) The purchaser aggrieved by the refusal to issue a
certificate by the Collector under sub-clause (ii) of
clause (c) may file an appeal to the State Government or
such officer, as it may, by an order in writing, authorise
in this behalf.
(ii) The State Government or the authorised officer shall,
after giving the appellant an opportunity of being heard,
pass such order on the appeal as it or he deems fit.
4) The purchaser to whom a certificate is issued under sub-
clause (i) of clause (c) of sub-section (3), shall commence
industrial activity on such land within three years from
the date of such certificate and commence production of
goods or providing of services within five years from such
date:
Provided that the period of three years or, as the case may be,
five years may, on an application made by the purchaser in that
behalf, be extended from time to time, by the State Government
or such officer, as it may, by an order in writing authorise in
this behalf, in such circumstances as may be prescribed.
(5) Where the Collector, after making such inquiry as he deems
fit and giving the purchaser an opportunity of being heard,
comes to a conclusion that the purchaser has failed to
commence industrial activity or production of goods or
providing of services within the period specified is clause
(b) of sub-section (4), or the period extended under the
proviso to that clause, the land shall vest in the State
Government free from all encumbrances on payment to the
purchaser of such compensation as the Collector may
determine, having regard to the price paid by the purchaser
and such land shall be disposed of by the State Government,
having regard to the use of land.”
The pleadings of the parties before the High Court:-
11. The appellants had contended in paragraph 6 of their Writ
Petition that the permission given to Indigold to sell the land was
contrary to the provisions and restrictions imposed under the law, and
contrary to the original permission granted to them by the Deputy
Collector, Bhuj, on 1.5.2003. The market value of the land in question goes
into crores of rupees, and such an act will result in huge loss to the
public exchequer. They had contended that the decision was malafide. The
decision was alleged to have been taken for a collateral purpose, which was
apparently neither legal nor in the interest of the administration and
public interest. Inasmuch as it was concerning disposal of public
property, the only mode to be adopted was a fair and transparent procedure
which would include holding a public auction inviting bids, and thereby
providing equal opportunity to all interested or capable industries, in
order to promote healthy competition and to fetch the right market price.
The decision has been taken at the instance of the Hon’ble Revenue
Minister. It was also submitted that, there were possibilities that the
directors / promoters and the management of Indigold and Alumina are the
same, and if that is so, it would be a design to defraud the Government.
Alumina had contended that it had signed an MOU with the State Government
during the Vibrant Gujarat Investors’ Summit, 2009. The appellants had
submitted that the same cannot be a ground to grant the permission to sell,
contrary to the mandatory provisions of law. Section 89A makes a contingent
provision in case the land is not used for industrial activity within the
time provided, and such mandatory provisions of the Act cannot be bypassed
merely upon the endorsement made by the Hon’ble Revenue Minister. The
action on the part of the State is absolutely arbitrary. The State or a
public authority which holds the property for the public, and which has the
authority to grant the largesse, has to act as a trustee of the people, and
therefore to act fairly and reasonably. The holders of pubic office are
ultimately accountable to the public in whom the sovereignty vests. The
action of the Government is arbitrary, and therefore violative of Article
14 of the Constitution of India.
12. Respondent No.5 was the first to file a reply to this petition
in the High Court which was affirmed by Mr. Nitin Patel on 11.7.2009. In
this reply he principally submitted that it was not correct to say that the
land was being given away at a throwaway price, causing great loss to the
public exchequer to the tune of Rs.250 crores, as alleged. The State
Authorities and the Revenue Minister have not acted in violation of any
mandatory provisions of law. The affidavit further narrated the various
events in the matter leading to the sale deed dated 19.1.2010 by Indigold
in favour of Alumina, and the permission of the Industries Commissioner
dated 8.3.2010. It was also pointed out that permission had been granted
by the Collector, Bhuj on 5.1.2011. Thereafter, it was contended that the
land has been purchased by the respondent No.5 way back in January 2010,
and the petition, making frivolous and baseless allegations, has been filed
two years after the said transaction.
13. Then, it was pointed out that the respondent No.5 was
incorporated under the Companies Act in the year 2008, and that the company
is promoted by Earth Refining Company Pvt. Limited. Respondent No.5 wanted
to manufacture high value added products from bauxite ore available in
Kutch district which ore was currently sold or exported as it is without
any value addition. The intention of respondent No.5 was in line with and
supported by Government of Gujarat Industries and Mines Policies, 2009.
The project was to be first of its kind in Gujarat, with technology
supplied to it by National Aluminum Company Ltd. (shortly known as NALCO),
a Government of India Enterprise. A share holding agreement dated
30.11.2011 had been entered into between GMDC and Earth Refining Company
Ltd. whereby GMDC had agreed to be joint venture partner, and to subscribe
to 26% of the equity share capital of the new company. NALCO has provided
advanced technology for the project.
14. It was further submitted in para 15 (g) of the reply that, the
opinions of all the subordinate officers are “inconsequential and not
binding on the Revenue Minister”. The decision of the Minister cannot be
faulted on the basis of certain notings of a lower authority.
15. One Mr. Hemendera Jayantilal Shah, Additional Secretary,
Revenue Department filed the reply on behalf of the respondent-State. In
paragraph 3.4 it was contended that the notings from the Government files
reflect only the exchange of views amongst the officers of the departments.
The decision of the State Government to grant permission for sale of the
land could not be said to be arbitrary, malafide or in the colourable
exercise of power. Three reasons were given in support thereof:-
(i) If the land had been directed to be vested in the State Government,
State would have been required to pay compensation to M/s Indigold under
Section 89A(5) which is otherwise a long-drawn process involving Chief Town
Planner and State Level Valuation Committee, for the purpose of determining
the valuation of the land, and thereafter for finding the suitable and
interested party to set up an industry on the land in question.
(ii) In the sale to Alumina, the State Government’s own interest through
its public sector undertaking had been involved, and therefore there has
been a substantial compliance of the spirit flowing from the provisions of
Section 89A(5).
(iii) The price of the land in question was around Rs.4.35 crores as per
the Jantri (i.e. official list of land price) at the relevant time, and it
had come down to Rs.2.08 crores, as per the revised Jantri rated of 2011.
Thus, apart from time being consumed in the process, perhaps there would
have been a loss to the public exchequer. Thereafter, it was stated in
paragraph 4 of the reply as follows:-
“I further respectfully say that the action of the State
Government was bonafide and taking into consideration all the
aspects of the matter, viz. (i) the land is being used for the
industrial purpose, (ii) a dire need for industrialization in
the Kutch District; (iii) MoU arrived at during the Vibrant
Summit, 2009, whereby, a ready and interested party was
available to start the industry immediately on the land in
question; and (iv) GMDC possessing 26% of the share in such
interested party, i.e. M/s Alumina Refinery Pvt. Ltd.”
It is relevant to note that no reply was filed on behalf of Indigold.
Additional pleadings of the parties in this Court:-
16. As far as this Court is concerned, a counter affidavit was
filed on behalf of the State Government by one Mr. Ajay Bhatt, Under
Secretary, Land Reforms. In his reply, he stated that in any event in the
present process the State is the beneficiary in permitting this transaction
with GMDC which is a Government Undertaking. It will have 26% stock in
respondent No.5. In paragraph 4(E)(e)(ii) he stated that since the
Government’s own interest was involved, there has been a substantial
compliance of the spirit flowing from the provisions of Section 89A(5) of
the Act.
17. A counter was also filed in this Court by one Mr. Deepak
Hansmukhlal Gor, Vice President of respondent No.5-Alumina. He pointed out
that although the petition in the High Court was moved as a PIL, the
petitioner No.1 was in fact a leader of the opposition party in the State.
In order to mislead the Court it was stated in the petition that the land
was worth Rs.250 crores. It was further submitted that to seek an interim
relief a false statement had been made in the writ petition that no
activity had been initiated by respondent No.5 on the concerned land by the
time writ petition was filed. The respondent No.5 had made substantial
investment and construction on the land, and photographs in that behalf
were placed on record. It was also submitted that the decision of the
State Government was in tune with Mineral Development Policy, 2008 of the
Government of India and Gujarat Mineral Policy, 2003. It was then pointed
out that apart from other controversies, the present controversy has also
been included for the consideration of Hon’ble Mr. Justice M.B. Shah,
Former Judge of this Court. The sale of land in the present case was
rightly considered as a special one, and the challenge thereto was highly
unjustified and impermissible. The respondent No.5 filed various documents
thereafter, including the various permissions obtained by respondent No.5
for the project and the technology supply agreement entered into between
NALCO and M/s Earth Refining Company Ltd. It was submitted that the
Respondent No. 5 is a bona-fide purchaser of the land, and in any case it
should not be made to suffer for having invested for industrial
development. It is claimed that Respondent No. 5 has made an investment to
the tune of Rs 6.85 crores as on 31.3.2012 on the project, and moved in
some machinery on the site.
18. The appellant No.1 has filed his rejoinder to both these
counters. He has stated that he has not suppressed that he is a political
activist, which is what he has already stated in the petition. He has
maintained his earlier submissions in the writ petition, and denied the
allegations made in the two counter affidavits.
19. As stated earlier, GMDC has applied for joining as respondent
No.6. In its application it has stated that Alumina was selected through
transparent evaluation. Then, it was short-listed for setting up the
project in Kutch at the Vibrant Gujarat Summit in 2009. It also defended
the Government’s decision on the ground that it is going to have 26% equity
in respondent No.5.
Points for consideration before this Court:
20. It, therefore, becomes necessary for this Court to examine
whether the decision taken by the Government to permit the transfer of the
agricultural land from respondent No. 4 to respondent No. 5, was legal and
justified.
For that purpose one may have to consider the developments in
this matter chronologically as disclosed from the above pleadings of the
parties, as well as from the material available from the Government files
placed for the perusal of the Court.
Thereafter, one will have to see the
scheme underlying Sections 89 and 89A, and then examine
whether there has
been any breach thereof, and if it is so what should be the order in the
present case?
Material on record and the material disclosed from the files of the
Government and the Collector:-
21. The respondents have contended that the sale transaction
between respondent Nos.4 and 5 took place because of the financial
constraints faced by respondent No.4 Indigold Refinery Limited, and that is
reflected in their letter dated 16.6.2009 addressed to the Collector, Bhuj.
The letter-head of the respondent No.4 shows that it claims to have a gold
refinery at Chitradurg in State of Karnataka. This letter refers to their
earlier letter dated 6.12.2008, and letter dated 12.6.2009 from respondent
No.5 Alumina. The relevant paragraph of letter dated 16.6.2009 reads as
follows:-
“……..
• With regret we have hereby to inform you that due to financial
constraints on our part we are unable to execute our proposed
refinery project on the said land. We are well aware of the
fact that sufficient amount of time has passed from the date of
permission granted by the office of Deputy Collector-Bhuj to set
up the project. We have tried our level best to set up the
industry on the land in question.”
• M/s Alumina Refinery (P) Ltd. having their registered office in
Mumbai has shown keen interest to set their Alumina Refinery
Project on our above mentioned ownership land.
• A copy of consent letter dated 12.06.2009 has already been sent
to your office by M/s Alumina Refinery (P) Ltd., whereby they
have applied to avail the permission to purchase our above
ownership land u/s 89.
• We appreciate and are thankful to your office and Government of
Gujarat for giving us an opportunity to purchase and set up of
our then proposed refinery project on the above mentioned
agricultural land.
• We would like to confirm that we had a clear intention to set up
industry on the above mentioned land, it is only because of non
availability of monetary fund we are not in a position to set up
our industry on the above mentioned agricultural land. Further,
we are also not having any intention to take any undue advantage
in form of booking any profit by sale of ownership land to M/s
Alumina Refinery (P) Ltd.
We, hereby request your office to kindly grant the permission to
sale all the above land and allow us to execute the Sale Deed for
registration with the competent authority…..”
(emphasis supplied)
22. The earlier letter dated 6.12.2008 mentioned in this letter of
16.6.2009, however, nowhere mentions that respondent No.4 had any financial
constraints because of which it could not set up the industry and thefore
it wanted to sell the particular land. This letter is seen in the file of
the Collector. This letter reads as follows:-
“INDIGOLD REFINERIES LIMITED
6th December 2008
To,
Collector of Kutch,
Bhuj, State of Gujarat
Sub:- Permission for the sale of agricultural land admeasuring 39
acres 25 gunthas at Moti Reladi Kukama, Taluka Bhuj, District Kutch,
State of Gujarat.
Dear Sir,
Reference to above, we have to respectfully inform your good self that
we had purchased land as per details here below for setting up of
Industrial project:-
Sr.no. Name of Village Survey No. Measurement
Acres and gunthas
1. Kukama 94/1 4/14
2. Kukama 94/2 2/16
3. Moti Reladi 101/1 9/30
4. “ 106 6/10
5. “ 100/1 2/20
6. “ 107 4/15
7. “ 105/4 5/21
8. “ 110/2/3 4/16
Total 39 acres 25 gunthas
The above piece of land was purchased with the permission granted by
Deputy Collector, Bhuj, Kutch, wide letter no. LND/VC/1169/03 dated
2nd May 2003. We further respectfully inform yourself that we are no
more interested to put any industrial project in the said land and
therefore we are disposing off entire piece of land as per aforesaid
details to our prospective client. We, therefore, request your good
self to kindly give us your permission for sale, so as to enable us to
register the sale deed with the concern competent authority.
We hope you will extend your maximum corporation and assistances in
this regard and oblige.
Thanking you
Yours faithfully
Sd/-
Indigold Refineries Ltd.
Hanumantrao V. Kharat”
(emphasis supplied)
23. As stated earlier, the File notings of the Revenue Department,
were obtained through an RTI inquiry, and were placed on record alongwith
the Writ Petition. The learned counsel for the State of Gujarat was good
enough to produce the original files for our perusal. In the file of the
Revenue Department, there is an Email dated 1.7.2009 from Shri Nitin Patel,
Chairman & MD of respondent No.5 forwarding his letter dated 30.6.2009
addressed to Smt. Anandiben M. Patel, Hon’ble Minister of Revenue recording
the minutes of the meeting held in her office on 29.6.2009. Immediately
thereafter, the respondent No.5 has written a letter to the Chief Minister
of Gujarat seeking permission to purchase these lands. The Secretary to the
Chief Minister, Shri A.K. Sharma has then sent a letter on 2.7.2009 to the
Principal Secretary, Revenue Department informing him that Shri Nitin
Patel, of respondent No.5, had approached them with their representation
dated 18.6.2009. It had inked an MOU during the Vibrant Gujarat Global
Summit for establishing an Alumina Refinery, and they had identified a land
suitable for that purpose. This letter further stated:
“On verification of the issue, necessary action may kindly
be taken at the earliest. In the meantime, a brief note
indicating the possible course of action may please be sent to
this office.”
24. In view of this note from the Secretary to the Chief Minister,
the Revenue Department sought the factual report from the Collector by
their letter dated 6.7.2009. What we find however, is that instead of
sending a factual report, the Collector fowarded the original proposal of
respondent No.5 itself to the Department, and sought their decision thereon
in favour of Alumina through his letter dated 31.7.2009. Thereafter, we
have the note dated 7.8.2009 in the Government file which is signed by then
Section Officer and Under Secretary, Land Revenue. This note refers to the
fact that a letter dated 2.7.2009 had been received from the Secretary to
the Chief Minister. Thereafter, a letter dated 31.7.2009 had been received
from the Collector, Kutch stating that respondent No.4 had purchased the
concerned land admeasuring 39 acres and 25 guntas, but no industrial use
had been made, and that the respondent No.5 had shown his willingness to
purchase the land. Thereafter, the note records what the Collector had
stated viz.
“Taking into consideration the reasons shown in the
submission of Alumina Refinery Company addressed to the Hon’ble
C.M., dated 18.6.2009, it is submitted to grant permission for
purchasing land”.
25. The departmental note thereafter states in sub-paragraph A, B,
C of paragraph 4, that under the relevant law the purchaser of the land
should commence the industrial activity within a period of 3 years from
date of the certificate of purchase, and within 5 years start the
manufacture of goods and provide the services. Where the purchaser fails
to commence the industrial activity, the Collector has to initiate an
enquiry as to whether the purchaser has failed to commence industrial
activity or production, as mentioned in clause (b) of sub-section 4.
Thereafter, if on giving the purchaser an opportunity to be heard, the
Collector comes to a conclusion that the purchaser has failed to do so, he
has to determine the payment of compensation, and pass an order that the
land shall vest in the State Government. Thereafter the note records:-
“ …..Taking into consideration the above provisions,
whatever action required to be taken, is to be taken by
Collector, Kutch, means there is no question at all of the
authority for a period of more than five years. Further vide
letter dated 6.7.2009, Collector was informed to submit factual
report. Instead of the same, proposal is submitted by him.
Vide order dated 1.5.2003 Deputy Collector has granted
permission to Indigold Refinery Company under Section-89 of the
T.A. with regard to the lands in question. The time limit of
this permission has come to an end. Now another company,
Alumina Refinery Co. wants to purchase land of this company and
establish a project. Looking to the same, taking into
consideration the above provisions, whatever action is required
to be taken, the same is to be taken at his (Collector) level
only. This is submitted for consideration whether to inform
Collector accordingly or not?
As Collector is required to take action as per the legal
provisions, any action on proposal of Collector is not required
to be taken by this office. Therefore, proposal of the
Collector be sent back.
Submitted respectfully…”
(emphasis supplied)
26. Since, the Secretary of the Hon’ble Chief Minister had sought a
note indicating the possible course of action, the Deputy Secretary, Land
Revenue made a note on 25.8.2009, and at the end thereof, he stated as
follows:-
“..……
Under these circumstances, looking to legal provisions,
there is a provision that either the company carries out the
industrial activity or the State Government resumes the land.
There is no provision for mutual transfer by the parties.
As suggested by the Secretary to the Hon’ble C.M., note
indicating the above position be sent separately.”
27. A note was, thereafter, made by the Principal Secretary, Land
Revenue, which recorded that as per existing policy such sale was not
permissible. In para 2 of his note he stated:
“as per rules, the land is to be resumed by Collector in
case of failure to utilize for industrial use”. In para 5
thereof he however suggested “that in such case, as in cases
under the Land Acquisition Act, 50% of the unearned income being
required to be charged by the State Government can be introduced
as a policy measure”.
The Principal Secretary, Revenue Department marked para 2 above as “A” and
then remarked on 29.8.2009 as follows:-
“We may resume as “A” of pre-page and allot as per the
existing policy on land price”.
The Chief Secretary wrote thereon on 1.9.2009 –
“We should take back the land. Allotment may be separately
examined”.
What is relevant to note is that the Minister of Revenue Smt. Anandiben
Patel thereafter put a remark on 10.9.2009:-
“Land is of private ownership. As a special case,
permission be granted for sale”.
28. Thereafter, it is seen from this file that in view of this
direction by the Minister, the matter was further discussed. A note was
then made by the Principal Secretary, Revenue Department on 21.9.2009 -
“Discussed. We may resubmit to adopt a procedure for such cases”. The
Principal Secretary, Land Revenue made a detailed note thereafter on
14.10.2009 referring to the amendment brought in by Gujarat Act No.7 of
1997 incorporating Section 63AA in the Bombay Tenancy and Agricultural
Lands Act, 1948, and the developments in the present matter up to the
noting made by the Minister, that the land may be permitted to be sold as a
special case. Thereafter, he sought an opinion as to whether or not an
action similar to a provision under the Land Acquisition Act on the
occasion of sale of land providing for taking of 50% amount of unearned
income by the State Government, be taken in the present case. The Chief
Secretary made a note thereon as follows:-
“It would be proper to give land to the new party provided
industry department recommends as per the laid down rules. As
indicated in page 9/D note (marginal). Let us take back land
under 63AA and then re-allot to the new party”.
15.10
The Minister still made a note thereon on 4.11.2009:-
“As a special case as suggested earlier, permission for
sale be given”.
In view of this direction by the minister, the department has, thereafter,
taken the decision that the permission be given as a special case but not
to be treated as precedent. Thus, the opinion of the Principal Secretary,
Land Revenue that 50% of the unearned income be taken by the Government was
not accepted. Similarly, the opinion of the Chief Secretary that the land
be resumed, and then be re-allotted to the new party was also not accepted.
29. This has led to the communication from the State Government to
the Collector dated 18.12.2009 that the Government had granted the
necessary permission to respondent No.5 to purchase the land, treating it
as a special case. The said letter reads as follows:-
“Urgent/RPAD
Sr. No.: GNT/2809/2126/Z State of Gujarat
Revenue Department
11/3 Sardar Bhavan
Sachivalay
Gandhinagar
Date: 18/12/2009
To,
The Collector
Kutch-Bhuj
Subject: Shri Nitin Patel c/o M/s Indigold Refinery/Alumina
Representation qua the land of Kukma and Moti Reldi
Reference: Your letter dated 31/9/09 bearing no. PKA-3-
Land- Vs. 2083/2009
Sir,
In connection with your above referred and subject letter, the
land of Kukma and Moti Reldi admeasuring Acre 39 Guntha 25 was
purchased by Indigold Refinery as per the provisions of Bombay Tenancy
and Agricultural Lands (Vidharbha Region and Kutch Area) Act, 1958;
Section 89. However due to financial incapability, the Company is
unable to establish industry and other company M/s Alumina Refinery
Pvt. Ltd. being ready to purchase the said land, upon careful
consideration the Government on the basis of treating the case as “A
special case and not to be treated as precedent” has granted the
permission.
2. Papers containing pages 1 to 89 are returned herewith.
Encl:
As above
Yours sincerely
Section Officer
Revenue Department
State of Gujarat
Copy to:
Select File/Z Branch
Select File/Z Branch/N.S.A”
30. Thereafter, the Deputy Collector has issued an order dated
15.1.2010 granting permission to sell the land for industrial purpose under
Section 89A of the Act. He, however, added that the action of issuing the
certificate can be taken only after the submission of a project report and
technical recommendation letter of Industries Commissioner by respondent
No.5. The above referred order dated 15.1.2010 of the Deputy Collector
granting permission to sale the land reads as follows:-
No. Jaman Vashi/218/09
Office of Deputy Collector
Bhuj, Date-15/01/2010
To
Shri Hanumantrav V. Kharat
Indi Gold Refineries Limited
201-212, EMCS House
289 SBSL, Fort
Mumbai-400 001
Subject:- Regarding getting the approval for sale of the agricultural
land of village Kukma and Moti Reldi, Taluka Bhuj purchased for
industrial purpose, under Section-89-A of the Tenancy Act.
Read:- Letter No. Ganat/2809/2126/Z dated 18/12/2009 of the Revenue
Department of the Government, Gandhinagar.
Sir,
With reference to the above subject it is to be informed that
vide this office certificate No. Land/Vasi/1169/03 dated 01/05/2003
you have been granted permission under Section-89-A of the Tenancy Act
for purchasing agricultural land for industrial purpose as under:-
In the above lands as the company due to financial circumstances
is not in a position to establish any industry, with reference to your
application dated 06/12/2008 seeking the permission for sale of the
above land for industrial purpose to Shri Alumina Refinery (Pvt.)
Limited, Mumbai for the Alumina Refinery project, vide the above
referred letter of the R.D. of the Government as a “special case and
with a condition not to treat as the precedent” the permission is
granted, which may be noted.
As the above land is admeasuring more than 25 Acres, in this
case on submission of the Project Report and the Technical
recommendation letter of Industries Commissioner, G.S., Gandhinagar by
the party desirous to purchase the land Alumina Refinery (Pvt.) Ltd.,
Mumbai, further action can be taken by this office for issuing the
certificate under Section-89 of the Tenancy Act, which may be noted.
Sd/-
Deputy Collector, Bhuj
Copy to
Alumina Refinery (Pvt.) Ltd.
1501-1502 Shiv Shankar Plaza-
Near HDFC Bank, Sector-8
Airoli, New Mumbai-400 708”
31. This led to the sale deed between respondent No.4 and 5 for
sale of the lands at Rs.1.20 crores. It is, however, interesting to note
that the sale deed is signed for Indigold by Nitin Patel on the basis of
the power of attorney from them, and for Alumina by his brother Nilesh
Patel. Subsequently the permission from the Industries Commissioner was
obtained on 8.3.2010, and the certificate under Section 89A (3) (c) (i) of
purchase for bona-fide industrial purpose on 21.5.2010.
The submissions on behalf of the appellants:-
32. The decision of the State Government to permit the transfer of
the concerned agricultural lands was challenged by the appellants on
various grounds. Firstly, it was submitted that Section 89 basically bars
transfer of agricultural land to the non-agriculturists. Section 89A makes
an exception only in favour of a bonafide industrial user. The industry is
required to be set-up within three years from the issuance of necessary
certificate issued by the Collector for that purpose, and the production of
the goods and services has to start within five years. If that is not
done, the Collector has to take over the land after holding an appropriate
enquiry under sub-section (5) of 89A, and the land has to vest in the
Government after paying the compensation to the purchaser which has to be
determined having regard to the price paid by the purchaser. In the
instant case, it is very clear that the respondent No. 4 had expressed
their inability to develop the industry way back on 6.12.2008. The
Collector was, therefore, expected to hold an enquiry and pass appropriate
order. This was a power coupled with a duty.
A judgment of this Court in
Indian Council for Enviro-Legal Action Vs. Union of India & Ors. reported
in 1996 (5) SCC 281, was relied upon to submit that a law is usually
enacted because the legislature feels that it is so necessary. When a law
is enacted containing some provisions which prohibit certain types of
activities, it is of utmost importance that such legal provision are
effectively enforced. In Section 89A there is no provision for a further
transfer by such a party which has not developed the industry, and
therefore, the Collector ought to have acted as required by Section 89A
(5). In that judgment it was observed “enacting of a law, but tolerating
its infringement, is worse than not enacting a law at all.” It was
submitted that in the instant case the state itself has issued an order in
violation of the law.
33. It was then submitted that the Collector was expected to
dispose of the land by holding an auction. The judgment of this court in
Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors.
reported in 2012 (3) SCC 1 was relied upon in support, wherein it has been
held that natural resources are national assets and the state acts as
trustee on behalf of its people. Public Interest requires that the
disposal of the natural resources must be by a fair, transparent and
equitable process such as an auction. The same having not been done, the
State exchequer has suffered. Reliance was also placed on the judgment in
Noida Entrepreneurs Association Vs. Noida and ors. reported in 2011 (6) SCC
508 to submit that whatever is provided by law to be done cannot be
defeated by an indirect and circuitous contrivance.
34. In the instant case, the transfer of the land has been
permitted because respondent No. 5 directly approached the Chief Minister
and thereafter the Revenue Minister. It was submitted that such an act of
making of a special case smacks of arbitrariness. The judgment of this
Court in Chandra Bansi Singh Vs. State of Bihar reported in 1984 (4) SCC
316 was relied upon in this behalf. In that matter the state of Bihar had
released a parcel of land acquired by it for the benefit of one particular
family which had alleged to have exercised great influence on the
Government of the time. The action of the State was held to be a clear act
of favouritism. Another judgment of this Court in Manohar Joshi Vs. State
of Maharashtra and Ors. reported in 2012 (3) SCC 619 was also relied upon
to criticise a direct approach to the ministers rather than going through
the statutory authorities. Reliance was also placed on the judgment in
Bhaurao Dagdu Paralkar Vs. State of Maharashtra reported in 2005 (7) SCC
605 which has explained the concept of ‘fraud’ from paragraph 9 to 12
thereof. In paragraph 12 amongst others it has referred to an earlier
judgment in Shrisht Dhawan Vs. Shaw Bros reported in 1992 (1) SCC 534 which
relies upon the English judgment in Khawaja Vs. Secy. of State for Home
Deptt. reported in 1983 (1) All ER 765. In para 20 of Shrisht Dhawan
(supra) this Court has observed:-
“ If a statute has been passed for some one particular
purpose, a court of law will not countenance any attempt which
may be made to extend the operation of the Act to something else
which is quite foreign to its object and beyond its scope.’
Present day concept of fraud on statute has veered round abuse
of power or mala fide exercise of power. It may arise due to
overstepping the limits of power or defeating the provision of
statute by adopting subterfuge or the power may be exercised for
extraneous or irrelevant considerations. The colour of fraud in
public law or administrative law, as it is developing, is
assuming different shades……”
35. The learned senior counsel for the appellants Mr. Huzefa Ahmadi
submitted that the appellants’ writ petition should not have been dismissed
only on the ground of delay, in as much as the environmental clearance to
the project was granted on 19.2.2012 and the writ petition was filed in
March 2012. He submitted that similarly the appellant cannot be criticised
for suppression of any information about the investment made by respondent
No. 5, since the appellant cannot be aware of the same. In any case he
submitted that in as much as there has been an immediate interim order, the
plea of large investment having been made is untenable. As far as the
objection to the appellant No 1 being a person belonging to a rival
political party is concerned, he submitted that he has specifically
accepted that he is a political activist. In any case, he submitted that
the Collector did not act in accordance with law at any point of time.
Similarly, the order passed by the Government is not a reasoned order and
is undoubtedly arbitrary. The power in the Collector implied a duty in him
to act in accordance with law. He relied upon a judgment of this Court in
Deewan Singh & Ors. Vs. Rajendra Pd. Ardevi & Ors. reported in 2007 (10)
SCC 528 in this behalf.
Submissions on behalf of the State Government:-
36 . The defence of the Government has principally been that because
Indigold was not in a position to set up the industry, and Alumina had
given a proposal in the Vibrant Gujarat summit to set up its project on the
very land, the proposal was accepted.
It had entered into an MOU with GMDC
which was to have 26% equity therein.
While looking into the proposal,
initially there was some hesitation on the part of the Government as can be
seen from the notings of the officers in the Government files. However,
ultimately looking into the totality of the factors, the Government took
the decision to permit the transfer of the land.
It is not mandatory that
the land must be resumed under Section 89A (5) of the Tenancy Act, if the
initial purchaser does not set up the industry.
Section 89A (5) does not
operate automatically. Besides, the permission to Indigold to sell the
land can be explained with reference to the authority of the Collector
available to him under the first proviso to Section 89(1) read with
condition No. (4) of the permission dated 1.5.2003 granted to Indigold to
purchase the concerned lands.
This condition No. (4) reads as follows:-
“4. These lands cannot be sold, mortgaged, gifted or
transferred in any manner etc. without obtaining prior
permission of the competent officer.”
Last but not the least, Section 126 of the Tenancy Act was relied upon to
submit that the State Government has an overall control which permits it to
issue the necessary directions. This Section 126 reads as follows:-
“126. Control- In all matters connected with this Act, the
State Government shall have the same authority and control over
the [Mamlatdar] and the Collectors acting under this Act as [it
has and exercises] over them in the general and revenue
administration.”
37. The learned senior counsel Mr. Andhyarujina appearing for the
State, submitted that the Collector had the authority to grant such a
permission to sell under Rule 45 (b) of the Bombay Tenancy and Agricultural
Lands Rules, 1959. This rule reads as follows:-
“45.Circumstances in which permission for sale, etc. of
land under section 89 may be granted - The Collector or any
other officer authorised under the proviso to sub-section (1) of
section 89 may grant permission for sale, gift exchange, lease
or mortgage of any land in favour of a person who is not an
agriculturists or who being an agriculturists, cultivates
personally land not less than three family holdings whether as
tenure holder or tenant or partly as tenure holder and partly as
tenant in any of the following circumstances:-
a) such a person bona fide requires the land for a non-
agricultural purpose; or
b) the land is required for the benefit of an industrial or
commercial undertaking or an educational or charitable
institution”
…..
Submissions on behalf of the other respondents:-
38. Since it was the respondent No.4 Indigold, which had initially
purchased the land for industrial purpose, the stand of Indigold was of
significance. It is, however, very relevant to note that Indigold had
neither filed any affidavit in the High Court, nor in this Court, and their
counsel Mr. Trivedi stated that he has no submissions to make. It is the
failure of the respondent No. 4 to set up the industry, and the subsequent
justification on the basis of financial difficulties for the same which has
led to the sale of the land. It is strange that such a party had nothing
to state before the Court. This is probably because it had already
received its price after selling the land. The respondent No. 4 appeared
to be very much disinterested in as much as even the sale documents were
signed on their behalf by Mr. Nitin Patel, the Managing Director of
Alumina. Mr. Ahmadi, learned counsel for the appellant therefore alleged
collusion amongst all concerned.
39. The respondent No. 5, however, contested the matter vigorously.
Mr. Krishnan Venugopal, learned senior counsel appearing for respondent
No. 5 pointed out that the respondent No. 5 had entered into a
correspondence with GMDC earlier, and thereafter participated in the
Vibrant Gujarat Summit. He pointed out that the respondent No. 5 had
previous experience in dealing in Alumina products, and therefore was
interested in setting up the plant in Kutch. It intended to use the
bauxite available in that district, and finally it was going to have a
production of 25,000 metric tonnes of Alumina per-annum. It was being set
up with an investment of Rs. 30 crores. The project was being set up in
furtherance of the Industrial Policy of the State of Gujarat and with the
technical know-how from NALCO. He drew our attention to the project report
and the photographs showing the work done so far.
40. It was submitted that the respondent No.5 had also entered into
an MOU with GMDC whereunder GMDC was to supply bauxite for 25 years, and it
was to have 26% equity participation. It is however, material to note that
there are 3 MOUs placed on record. The first MOU is dated 13.1.2009
between Alumina Refinery Pvt. Ltd. and GMDC which is basically like a
declaration of intent to set up the plant, and it contains the assurance of
support from the Government of Gujarat. The second MOU between them is
dated 9.9.2009, and it records that Government of Gujarat has agreed to
support this refinery, and that the GMDC had agreed to supply, on priority
basis, the plant-grade bauxite to this plant. It is this document which
states that GMDC will invest in the equity of Alumina Refinery to an extent
not exceeding 26%. It contains the promise to supply bauxite. Mr.
Krishnan Venugopal, fairly accepted that this document cannot be construed
as a contract, and that it can at best be utilised as a defence to insist
on a promissory estoppel. The third MOU is dated 30.11.2011 which is an
agreement between Earth Refinery Pvt. Ltd. which the holding company of
Respondent No. 5 and GMDC. In clause 2.1 of this agreement they have
agreed to set up a joint venture Company by name Alumina Refinery Ltd.
Clause 6.2 of this agreement states that equity participation of GMDC in
this company shall be 26%. The obligation of GMDC has been spelt out under
clause 4.2 to supply bauxite.
41. The principal submission of respondent No. 5 is that it is a
bonafide purchaser of land of respondent No. 4, it has a serious commitment
for industrial development, and it is acting in accordance with the
industrial policy of the State. There is nothing wrong if the Minister
directs the transfer of the unutilized land of respondent No. 4 to
respondent No. 5 for industrial purpose, and this should be accepted as
permissible. The minister’s action cannot be called malafide since it is in
the interest of the industrial development of the State. Mr. Krishnan
Venugopal submitted that the right to transfer is incidental to the right
of ownership, and relied upon paragraph 36 of the judgment of this Court in
DLF Qutab Enclave Complex Educational Charitable Trust Vs. State of Haryana
and Ors. reported in 2003 (5) SCC 622. He further submitted that unless
the possession of the unutilized area is taken over by the State, the
landlord’s title to it is not extinguished. There is no automatic vesting
of land in the instant case. He relied upon the judgment of this Court in
Ujjagar Singh Vs. Collector reported in 1996 (5) SCC 14 in this behalf.
42. It was then submitted that notings cannot be made a basis for
an inference of extraneous consideration, and reliance was placed upon the
observations of this Court in paragraph 35 in Jasbir Singh Chhabra Vs.
State of Punjab reported in 2010 (4) SCC 192. He pointed out that the law
laid down in Centre for Public Interest Litigation and Ors. Vs. Union of
India and Ors. (supra) had been clarified by a Constitution Bench in the
matter of Natural Resources Allocation, In Re: Special Reference (1) of
2012 reported in 2012(10) SCC 1. He referred to paragraph 122 of the
judgment which quotes the observations from Katuri Lal Lakshmi Reddy Vs.
State of J&K reported in 1980 (4) SCC 1 as follows:-
” 122. In Kasturi Lal Lakshmi Reddy v. State of J&K, while
comparing the efficacy of auction in promoting a domestic
industry, P.N. Bhagwati, J. observed: (SCC p. 20, para 22)
“22. … If the State were giving a tapping contract
simpliciter there can be no doubt that the State would have to
auction or invite tenders for securing the highest price,
subject, of course, to any other relevant overriding
considerations of public wealth or interest, but in a case like
this where the State is allocating resources such as water,
power, raw materials, etc. for the purpose of encouraging
setting up of industries within the State, we do not think the
State is bound to advertise and tell the people that it wants a
particular industry to be set up within the State and invite
those interested to come up with proposals for the purpose. The
State may choose to do so, if it thinks fit and in a given
situation, it may even turn out to be advantageous for the State
to do so, but if any private party comes before the State and
offers to set up an industry, the State would not be committing
breach of any constitutional or legal obligation if it
negotiates with such party and agrees to provide resources and
other facilities for the purpose of setting up the industry…..”
He also referred to paragraph 146 of the judgment (Per Khehar J), therein,
where the learned Judge has observed that the court cannot mandate one
method to be followed in all facts and circumstances, and auction and
economic choice of disposal of natural resources is not a constitutional
mandate. It was therefore submitted that, it was not necessary that the
Collector ought to have opted for auction of the concerned parcel of land.
43. The learned senior counsel Mr. Krishnan Venugopal, lastly drew
our attention to the Jantri prices of the land in 2008. He pointed out that
at the highest, the State would have sold this land, as per the Jantri
price, for Rs. 4.35 crores. Assuming that the State was also to pay Rs.
1.20 crores as compensation to Indigold, the loss to the State would come
to Rs 3.15 crores. He submitted that if it comes to that, the respondent
No. 5, alongwith Indigold, could be asked to compensate the state for this
difference of 3.15 crores or such other amount as may be directed, but its
project must not be made to suffer.
44. GMDC was represented by learned senior counsel Mr. Giri. He
defended the action of the State as something in furtherance of the
industrial policy of the State. If the land was to be sold and
compensation was to be given, it may not have resulted into much benefit to
the state. He relied upon Section 7 of the Transfer of Property Act, to
submit that every person competent to contract, and entitled to
transferable property can transfer such property, and under S 10 of the
said Act any condition restraining alienation was void. He relied on
paragraph 20 of the judgment in Prakash Amichand Shah Vs. State of Gujarat
reported in 1986 (1) SCC 581, to submit that divesting of title takes place
only statutorily, and which had not happened in the instant case.
Examination of the Scheme underlying Sections 89 and 89A above:-
45. Before we examine the submissions on behalf of all the parties,
it becomes necessary to examine the scheme underlying the relevant sections
89 and 89A. As can be seen, Section 89 essentially bars the transfers of
agricultural lands to non-agriculturists. The said section is split into
four parts.
(a) Sub-section (1) provides that no sale or mortgage, gift, exchange or
lease of any land, or no agreement in that behalf shall be valid in favour
of a non-agriculturist. The first proviso to Section 89 (1) makes an
exception viz. that the Collector or an officer authorised by the State
Government in this behalf may grant permission for such sale, gift,
exchange, lease or mortgage for that purpose, in such circumstances as may
be prescribed. The second proviso of course provides that no permission is
required where the land is being sold to a person who is not an
agriculturist, but it is sold for agricultural purpose.
(b) Sub section (2) provides that the above restriction will not apply to a
sale etc. in favour of an agricultural labourer or an artisan
(c) Sub-section (3) similarly provides that the above restriction will not
apply to a mortgage in favour of a cooperative society, to secure a loan
therefrom.
(d) Sub-section (4) lays down that the restriction under Section 90 with
respect to the reasonable price for the land to be sold will not apply to
the sale under Section 89(1).
46. Section 89A creates an exception to Section 89 for sale of land
for bona-fide industrial purposes in certain cases. This section is split
into five sub-sections. Sub-section (1) of Section 89A deals with those
lands for which no permission is required under sub-section (1) of Section
65B of the Bombay Land Revenue Code, 1879, i.e. lands such as those in
industrial zone etc. It lays down that nothing in Section 89 will prohibit
the sale or the agreement of sale of such zonal land in favour of any
person for use of such land by such person for a bona-fide industrial
purpose. Section 89A, creates an exception to Section 89 by allowing a sale
of land for bonafide industrial purpose in certain cases as contemplated
under the said section. These requirements are laid down in the provisos
(a) to (d) of sub-section (1) and in sub-section (2) to (4) of Section 89A.
They are as follows:-
(i) That the land is not situated within an urban agglomeration,
(ii) A prior permission of the Industries Commissioner of the State is to
be obtained where the area of the land proposed to be sold exceeds ten
hectares,
(iii) The land proposed to be sold shall not exceed four times the area on
which the construction of the industry is to be put up excluding the
additional land for pollution measures,
(iv) If the land belongs to a tribal, it shall be subjected to certain
additional restrictions,
(v) Within 30 days the purchaser has to inform the Collector of such
purchase failing which he is liable to a fine,
(vi) The Collector has thereafter to make an enquiry whether the land is
purchased for a bonafide industrial purpose and issue a certificate to that
effect. In case he is not satisfied of the bonafide industrial purpose, he
has to hear the purchaser, and thereafter he may refuse issuance of such
certificate against which an appeal lies to the State Government.
(vii) Lastly, the purchaser has to commence the industrial activity within
three years from the date of certificate, and start the production of goods
and services within five years from the date of issuance of certificate.
47. Where the purchaser fails to start the industrial activity as
stipulated above, Section 89A (5) requires the Collector to hold an
enquiry, wherein he has to give the purchaser an opportunity of being
heard. Thereafter, if he confirms such a view, he is expected to pass an
order that the land shall vest in the Government which will, however, be
done after determining appropriate compensation payable to the purchaser,
which has to be done having regard to the price paid by the purchaser. Then
the land shall be disposed of by the Government having regard to the use of
the land. Thus, the only authority contemplated under the section is the
Collector, and the decision is to be taken at his level. It is only in the
event of his refusing to give the certificate of purchase for bonafide
industrial purpose that an appeal lies to the State Government. Thus,
where one wants to purchase agricultural land for industrial purposes, one
has to first obtain the permission of the Industries Commissioner. The
purchaser has also to inform the Collector about the purchase within 30
days of such purchase, and obtain a certificate that the land is purchased
for a bonafide industrial purpose. He has to see to it that the industrial
activity starts in three years from the date of such certificate, and the
production of goods and services also starts within five years thereof,
which period can be extended by the State Government, in an appropriate
case. In the event the purchaser fails to commence such industrial
activity, the Collector has to make an enquiry, and thereafter pass an
appropriate order of resumption of the land on determining the
compensation. Thus, the entire authority in this behalf is with the
Collector and none other.
Have the provisions of Sections 89 and 89A been complied in the present
case:-
48. Now, we may examine the developments in the present matter on
the backdrop of these statutory provisions. It is relevant to note that in
their first letter dated 6.12.2008, the respondent No.4 has not referred to
any financial constraint. The letter merely states that respondent No.4
wanted to dispose off the entire piece of land since they were no more
interested in putting up any industrial project in the said land. As can
be seen from Section 89A, the object of the section is to permit transfer
of agricultural land, only for a bonafide industrial purpose. Where the
land exceeds ten hectares, such a purchaser has to obtain, to begin with, a
previous permission of the Industries Commissioner before any such sale can
be given effect to. Thereafter, the purchaser has to send a notice to the
Collector within 30 days of the purchase, and the Collector has to be
satisfied that the land has been validly purchased for a bonafide
industrial purpose, in conformity with the provisions of sub-section (1),
and then issue a certificate to that effect. There is a further
requirement that the purchaser has to commence the industrial activity
within three years, and has to start the production within five years from
the date of issuance of the certificate. Admittedly no such steps were
taken by Indigold, nor was any affidavit in reply filed by them, either
before the High Court or before this Court. Mr. Trivedi, learned counsel,
appeared for Indigold, and he was specifically asked as to what were the
attempts that had been made by respondent No.4 to set up the industry, and
what were the difficulties faced by it. He was asked as to whether there
was any material in support of the following statement made in Indigold’s
letter dated 16.6.2009 i.e. ‘we have tried our level best to set up the
industry on the land in question.’ Mr. Trivedi stated that he had nothing
to say in this behalf. All that he stated was that the respondent No.4
purchased the land, it was unable to set up its unit, and it sold the land
to respondent No.5.
49. What is, however, material to note in this behalf is that
whereas the land is supposed to have been purchased in 2003 at a price of
Rs.70 lakhs, it is said to have been sold at Rs.1.20 crores in 19.1.2010.
It is very clear that even before the letter of 16.6.2009 proposing to sell
the land to respondent No.5, in December 2008 itself respondent No.4 had
written to the Collector that they were no more interested in putting up
the industrial project, and therefore they wanted to dispose off the piece
of land to their prospective clients.
That being the position, it was
mandatory for the Collector at that stage itself to act under sub-Section 5
of Section 89A to issue notice, conduct the necessary enquiry, determine
the compensation and pass the order vesting the land in the State
Government.
It is very clear that Collector has done nothing of the kind.
In any case he should have taken the necessary steps in accordance with law
at least after receiving the letter dated 16.6.2009. Again he did not take
any such steps.
50. It has been pointed out by the respondents that the
representative of respondent No.5 participated in the Vibrant Gujarat
Global Investors Summit on 31.1.2009, and signed an MOU with respondent
No.6 for setting up a specialty alumina plant in Kutch. The MOU stated
that the Government of Gujarat was assuring all necessary permissions to
respondent No.5. The respondent No.5 will be investing an amount of Rs.30
crores in the proposed plant, and it will provide employment to 80 persons.
Thereafter, the above referred letter dated 12.6.2009 was addressed by the
respondent No.5 to the Deputy Collector Bhuj. The letter sought permission
to purchase land belonging to Indigold. It referred to the letter of
respondent No.4 dated 6.12.2008. It stated that the respondent No.5 would
like to purchase the land for a bonafide industrial purpose, for setting up
their upcoming project, Alumina Refinery Limited, on the land admeasuring
39 acres and 25 gunthas, situated in villages Kukma and Moti Reladi. It
then sought the permission from the competent authority, under Section 89
of the Tenancy Act, 1958 to register the sale in their favour.
51. After writing to the Collector on 16.6.2009, without waiting
for any communication from him, Alumina wrote to the Chief Minister on
18.6.2009. Directors of Alumina had a meeting with the Minister of Revenue
Smt. Anandiben Patel on 29.6.2009, which was recorded by Mr. Nitin Patel on
30.6.2009. The Chief Minister’s Secretary wrote to the Principal Secretary,
Revenue Department on 2.7.2009 seeking a note on the possible course of
action. The Revenue Department sought a factual report from the Collector,
who instead of furnishing the same, forwarded the proposal of Alumina
itself to the Department for granting the permission for the sale. The
Department looked into the statutory provisions, and then recorded on
7.8.2009 that the Collector is required to take an action at his level in
the matter, and the proposal be sent back to him. After looking into the
legal position, the Principal Secretary, Revenue Department and the Chief
Secretary of the State wrote that the land be taken back, and thereafter
the issue of allotment be examined separately.
52. The matter could have rested at that, but the Minister of
Revenue put a remark that permission be granted as a special case, since
the land is of private ownership. The matter was again discussed
thereafter, and then a suggestion was made by the departmental officers
that 50% of the unearned income may be sought from the seller. The Chief
Secretary noted that land may be given to the new party provided Industries
Department recommends it as per the laid down rules. He maintained that
the land be taken back, and then be re-allotted to the new party. The
Minister, however, again passed an order that as suggested earlier by her,
permission be given and, therefore, the Collector ultimately granted the
permission as directed by the Government. Thus, as can be seen, that
instead of the statutory authority viz. the Collector acting in accordance
with the statutory mandate, only because a direction was given by the
Minister that the statutory authority was bypassed, and even the enquiry as
contemplated under sub-section 5 of Section 89A was given a go-by. Thus,
as can be seen from the above narration what emerges from the record is
that whereas Sections 89 and 89A contemplate a certain procedure and
certain requirements, what has been done in the present matter is quite
different. We may refer to Lord Bingham’s work titled ‘Rule of Law’ where
in the Chapter on exercise of power, he observes that:
‘Ministers and public officers at all level must exercise the
powers conferred on them in good faith, fairly, for the purpose for
which the powers were conferred, without exceeding the limits of such
powers and not unreasonably’ .
He quotes from R v. Tower Hamlets London Borough Council [1988] AC 858,
which states:
‘Statutory power conferred for public purposes is
conferred as it were upon trust, not absolutely, that is to say, it
can validly be used only in the right and proper way which the
parliament, when conferring it, is presumed to have intended.’
53. It is well settled that where the statute provides for a thing
to be done in a particular manner, then it has to be done in that manner
and in no other manner. This proposition of law laid down in Taylor Vs.
Taylor (1875) 1 Ch D 426,431 was first adopted by the Judicial Committee
in Nazir Ahmed Vs. King Emperor reported in AIR 1936 PC 253 and then
followed by a bench of three Judges of this Court in Rao Shiv Bahadur
Singh Vs. State of Vindhya Pradesh reported in AIR 1954 SC 322. This
proposition was further explained in paragraph 8 of State of U.P. Vs.
Singhara Singh by a bench of three Judges reported in AIR 1964 SC 358 in
the following words:-
“8. The rule adopted in Taylor v. Taylor is well recognised
and is founded on sound principle. Its result is that if a
statute has conferred a power to do an act and has laid down the
method in which that power has to be exercised, it necessarily
prohibits the doing of the act in any other manner than that
which has been prescribed. The principle behind the rule is that
if this were not so, the statutory provision might as well not
have been enacted….”
This proposition has been later on reiterated in Chandra Kishore Jha Vs.
Mahavir Prasad reported in 1999 (8) SCC 266, Dhananjaya Reddy Vs. State of
Karnataka reported in 2001 (4) SCC 9 and Gujarat Urja Vikas Nigam Limited
vs. Essar Power Limited reported in 2008 (4) SCC 755.
54. (i) Therefore, when Indigold informed the Collector on 6.12.2008
that they were ‘no more interested’ to put up any industrial project, and
were disposing of the entire piece of land to their prospective client, the
Collector was expected to hold the necessary enquiry. This was the minimum
that he was expected to do. After holding the enquiry, if he was convinced
that the industrial activity had not been started, he was expected to pass
an order that the land will vest in the State which will have to be done
after determining the compensation payable having regard to the price paid
by the purchaser. In the instant case, the respondent No.4 claims to have
purchased the land for Rs.70 lakhs. As pointed out by Mr. Krishnan
Venugopal himself, as per the jantri price of the lands at that time, i.e.
even at the Government rate in 2008, the land was worth Rs.4.35 crores.
The collector was expected to dispose of the land by auction which is the
normal method for disposal of natural resources which are national assets.
Out of that amount, the compensation payable to the respondent no.4 would
have been around Rs.70 lakhs having regard to the amount that the
respondent No.4 had paid. This is because respondent no. 4 had purchased
agricultural land to put up an industry, and they had taken no steps
whatsoever for over five years to set up the industry. They were not
expected to purchase the land, and thereafter sell it for profiteering. The
Jantri price is an official price. In actual auction the State could have
realised a greater amount. In permitting the sale inter-se parties, the
State exchequer has positively suffered.
(ii) On the other hand, in the event, the Collector was to form an opinion
after receiving the bids or otherwise that it was not worth disposing of
the land in that particular way, he could have divested Respondent No. 4 of
the land by paying compensation, and re-allotted the same to the Respondent
No 5 at an appropriate consideration. The statute required him to act in a
particular manner and the land had to be dealt in that particular manner
only, and in no other manner, as can be seen from the legal position,
accepted in various judgments based on the proposition in Taylor vs.
Taylor.
55. Thus inspite of the Secretaries repeating their advice, the
Minister of Revenue Smt. Anandiben Patel has insisted on treating this case
as a special case for which she has recorded no justifiable reasons
whatsoever, and orders were issued accordingly. Under Section 89A(3), the
Government is the appellate authority where the Collector does not grant a
certificate for purchase of bonafide industrial purpose. Thus what has
happened, thereby is that the powers of the statutory authority have been
exercised by the Government which is an appellate authority.
56. The State Government gave three additional reasons when it
defended its decision. (i)The first reason was that if the land had been
directed to be vested in the State Government, State would have been
required to pay compensation to Indigold, and it would have been a long-
drawn process for determining the valuation of the land, and thereafter for
finding the suitable and interested party to set up an industry. As stated
earlier, this plea is not tenable. If the law requires something to be
done in a particular manner, it has got to be done in that way and by no
other different manner. (ii) The second reason given was that the action
was in State’s own interest because through its public sector undertaking
i.e. GMDC, it was involved in the transaction viz. that is it is going to
have 26% equity. As far as this part is concerned again it is difficult to
accept this reason also because one does not know what will be the value of
shares of the new company. (iii) Third reason given was that the land was
worth Rs.4.35 crores as per the Jantri in 2008, and as per the revised
Jantri in 2011 it had come down to Rs.2.08 crores. This is a situation
which was brought about by the State itself and this cannot be a ground for
the State to submit that it would not have gained much in the process.
57. That apart it has to be examined whether the Government had
given sufficient reasons for the order it passed, at the time of passing
such order. The Government must defend its action on the basis of the
order that it has passed, and it cannot improve its stand by filing
subsequent affidavits as laid down by this Court long back in Commissioner
of Police, Bombay vs. Gordhandas Bhanji reported in AIR 1952 SC 16 in the
following words:-
“Public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of explanations
subsequently given by the officer making the order of what he
meant, or of what was in his mind, or what he intended to do.
Public orders made by public authorities are meant to have
public effect and are intended to affect the actings and conduct
of those to whom they are addressed and must be construed
objectively with reference to the language used in the order
itself.”
This proposition has been quoted with approval in paragraph 8 by a
Constitution Bench in Mohinder Singh Gill vs. Chief Election Commissioner
reported in 1978 (1) SCC 405 wherein Krishna Iyer, J. has stated as
follows:-
“8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain grounds,
its validity must be judged by the reasons so mentioned and
cannot be supplemented by fresh reasons in the shape of
affidavit or otherwise. Otherwise, an order bad in the beginning
may, by the time it comes to court on account of a challenge,
get validated by additional grounds later brought out.”
In this context it must be noted that the Revenue Minister’s direction
merely states that it is a private land, and the Governments letter dated
18.12.2009 speaks of the financial incapability of Inidgold. Neither the
letter dated 18.12.2009 from the Government to the Collector, nor the order
passed by the Deputy Collector on 15.1.2010 mention anything about:
1. the mineral policy of the Government of Gujarat.
2. the time taking nature of the process of acquiring the land and re-
allotting it.
3. That the second sale was under the authority of the Collector
available to him under the first proviso to Section 89(1) read with
condition no. (4) of the permission dated 1.5.2003 granted to Indigold
to purchase the concerned lands.
In the absence of any of these factors being mentioned in the previous
orders, it is clear that they are being pressed into service as an after-
thought. The Government can not be allowed to improve its stand in such a
manner with the aid of affidavits.
58. As noted earlier, the State Government is an Appellate
Authority under sub-section 3 of Section 89A, and it could not have given a
direction to the Collector who was supposed to take the decision under his
own authority. We may profitably refer to a judgment of a Constitutional
Bench in State of Punjay vs. Hari Kishan reported in AIR 1966 SC 1081. In
that matter, the respondent desired to construct a cinema at Jhajhar. He
submitted an application and under the orders of the State Government all
applications were directed to be referred to the State Government.
Therefore, though his application was initially accepted, the SDO informed
him that the application was rejected. He appealed to the State Government
and the appeal was rejected which has led to the petition in the High
Court. The Punjab High Court framed the question as to whether the State
of Punjab was justified in assuming the jurisdiction which was conferred on
the licensing authority by the act. The Supreme Court held in paragraph 4
of the judgment, that the course adopted by the State of Punjab had
resulted in the conversion of the appellate authority into the licensing
authority. That was not permissible, and so it is in the present case. The
reliance by the State Government on the overall control of the State under
Section 126 of the Tenancy Act cannot be used when in the instant case the
power is with the Collector and the appellate power is with the State
Government. The power under Section 126 can be utilized for giving general
guidelines, but not for interference or giving directions in individual
cases.
59. The submission that condition No.4 of the permission to
purchase, obtained by respondent No.4 in 2003 permits the Collector to pass
such an order is equally untenable. There is nothing in the statutory
scheme to suggest that a second sale, inter se parties, after the failure
of a purchaser to set up an industry is permissible. In such an event, the
statute requires an enquiry to be conducted by the collector. If he is
satisfied that there is a failure to set up the industry, the compensation
to be paid to the purchaser is determined. After this stage the land vests
in the Government. It is thus clear that the condition No 4 in the
permission obtained by Respondent No. 4 is bad in law, not having its basis
in any statutory provision. Even assuming that the Collector had that
power to lay down such a condition, the authority to permit the sale as per
the said condition had to be exercised by him in the manner contemplated
under Section 89 A (5) viz. after holding the enquiry as prescribed. Here
the enquiry itself was dispensed with. Rule 45(b) of the Bombay Tenancy and
Agricultural Lands Rules, 1959 also cannot be pressed into service for the
reason that, neither under Section 89 nor under Section 89A, a sale inter-
se parties is contemplated or permitted.
60. Now, what is to be noted is that wherever an agriculturist is
in possession of a land, either as an owner or as a tenant protected by the
statute, transfer of his land for industrial purposes is subject to the
conditions regulated by the Act. It is for the protection and preservation
of the agricultural land that the bar against conversion is created under
Section 89. Thereafter, as an exception, only a bonafide use for industrial
purpose is permissible under section 89A. Ownership of respondent No.4 was
subject to the conditions of utilization for bonafide industrial purpose,
and it was clear on record that respondent No.4 had failed to utilize the
land for bonafide industrial purpose. The reliance on Sections 7 and 10 of
the Transfer of Property Act is also misconceived in the present case,
since the Tenancy Act is a welfare enactment, enacted for the protection of
the agriculturists. It is a special statute and the sale of agricultural
land permitted under this statue will have to be held as governed by the
conditions prescribed under the statute itself. The special provisions made
in the Tenancy Act will therefore prevail over those in the Transfer of
Property Act to that extent.
61. Besides, the present case is clearly a case of dictation by the
State Government to the Collector. As observed by Wade and Forsyth in Tenth
Edition of Administrative Law:-
“if the minister’s intervention is in fact the effective
cause, and if the power to act belongs to a body which ought to
act independently, the action taken is invalid on the ground of
external dictation as well as on the obvious grounds of bad
faith or abuse of power”.
The observations by the learned authors to the same effect in the Seventh
Edition were relied upon by a bench of three judges of this Court in
Anirudhsinhji Karansinhji Jadega and anr. vs. State of Gujarat reported in
1995 (5) SCC 302. In this matter the appellant was produced before the
Executive Magistrate, Gondal, on the allegation that certain weapons were
recovered from him. The provisions of TADA had been invoked. The
appellant’s application for bail was rejected. A specific point was taken
that the DSP had not given prior approval and the invocation of TADA was
non-est. The DSP, instead of granting prior approval, made a report to the
Additional Chief Secretary, and asked for permission to proceed under TADA.
The Court in para 13, 14, 15 has held this to be a clear case of
‘dictation’, and has referred to Wade and Forsyth on ‘Surrender Abdications
and Dictation’.
62. The respondent No.5 had the courage to state that the notings
of the Secretaries were inconsequential. As a beneficiary of the largesse
of the Government, respondent No.5 could say that, but it is not possible
for us to accept the same. In Trilochan Dev Sharma vs. State of Punjab
reported in AIR 2001 SC 2524 what is observed by this Court is relevant for
our purpose
“In the system of Indian Democratic Governance, as
contemplated by the constitution, senior officials occupying key
positions such as Secretaries are not supposed to mortgage their
own discretion, volition and decision making authority and be
prepared to give way or being pushed back or pressed ahead at
the behest of politications, for carrying out commands having no
sanctity in law.”
A higher civil servant normally has had a varied experience and the
ministers ought not to treat his opinion with scant respect. If Ministers
want to take a different view, there must be compelling reasons, and the
same must be reflected on the record. In the present case, the Secretaries
had given advice in accordance with the statute and yet the Minister has
given a direction to act contrary thereto and permitted the sale which is
clearly in breach of the statute.
63. Now, the effect of all that is stated above is that the land
which was purchased by respondent No.4 for Rs.70 lakhs is permitted by the
Government of Gujarat to be sold directly to respondent No.5 at Rs.1.20
crores to set up an industry which could not have been done legally. It is
undoubtedly not a case of loss of hundreds of crores as claimed by the
appellants, but certainly a positive case of a loss of a few crores by the
public exchequer by not going for public auction of the concerned property.
It is true as pointed out by Mr. Venugopal, learned senior counsel that in
a given case the state may invite an entrepreneur and give an offer.
However, in the instant case, the sale of the land for industrial purpose
is controlled by the statutory provisions, and the State was bound to act
as per the requirements of the statute. The minister’s direction as seen
from the record clearly indicates an arbitrary exercise of power. The
orders passed by the Government cannot therefore be sustained. As seen
earlier, there is neither a power nor a justification to make any special
case, in favour of the Respondent No 5. Such exceptions may open floodgates
for similar applications and orders, even though the Gujarat Government is
contending that this order is purportedly not to be treated as a precedent.
64. In our view, considering the scheme of the act, the process of
industrialization must take place in accordance therewith. As stated
earlier if the law requires a particular thing should be done in a
particular manner it must be done in that way and none other. The State
cannot ignore the policy intent and the procedure contemplated by the
statute. In the instant case, the State could have acquired the land, and
then either by auction or by considering the merit of the proposal of
respondent No.5 allotted it to respondent No.5. Assuming that the
application of the Respondent No 5 was for a bona-fide purpose, the same
had to be examined by the industrial commissioner, to begin with, and
thereafter it should have gone to the collector. After the property vests
in the Government, even if there were other bidders to the property, the
collector could have considered the merits and the bona-fides of the
application of Respondent No. 5, and nothing would have prevented him from
following the course which is permissible under the law. It is not merely
the end but the means which are of equal importance, particularly if they
are enshrined in the legislative scheme. The minimum that was required was
an enquiry at the level of the Collector who is the statutory authority.
Dictating him to act in a particular manner on the assumption by the
Minister that it is in the interest of the industrial development would
lead to a breach of the mandate of the statute framed by the legislature.
The Ministers are not expected to act in this manner and therefore, this
particular route through the corridors of the Ministry, contrary to the
statute, cannot be approved. The present case is clearly one of dereliction
of his duties by the Collector and dictation by the Minister, showing
nothing but arrogance of power.
65. The High Court has erred in overlooking the legal position. It
was expected to look into all the earlier mentioned aspects. The impugned
judgment does not reflect on the issues raised in the petition. It could
not be said that the petition was delayed and merely because investment had
been made by the respondent No.5, the court would decline to look into the
important issues raised in the PIL.
Epilogue:-
66. Before we conclude, we may observe that India is essentially a
land of villages. Although, urbanization and industrialization is taking
place, the industry has not developed sufficiently, and large part of our
population is still required to depend on agriculture for sustenance. Lands
are, therefore, required to be retained for agricultural purposes. They are
also required to be protected from the damage of industrial pollution.
Bonafide industrial activity may mean good income to the entrepreneurs, but
it should also result into good employment and revenue to the State,
causing least pollution and damage to the environment and adjoining
agriculturists. While granting the permission under Section 89A (5) the
Collector has to examine all these aspects. This is because the only other
exception for conversion of agricultural lands to non-agricultural purpose
is for those lands which are in an industrial zone. As far as the
conversion of lands otherwise than those in the industrial zone is
concerned, all the aforesaid precautions are required to be taken when a
decision is to be arrived at as to whether the application is for a
bonafide industrial purpose. In the instant case, there were newspaper
reports of apprehensions and protest of the adjoining farmers. The Revenue
Secretary and the Chief Secretary had placed the statutory provisions on
record. It was expected of the Government and the Revenue Minister to take
cognizance of these apprehensions of the farmers as well as the statutory
provisions brought to her notice by the secretaries. She has simply
brushed aside the objections of the secretaries merely because the Chief
Minister’s secretary had written a letter, and because she was the minister
concerned. While over-ruling the opinion of secretaries to the concerned
department, the Minister was expected to give some reasons in support of
the view she was taking. No such reason has come on record in her file
notings. She has ignored that howsoever high you may be, the law is above
you.
67. Development should not be measured merely in terms of growth of
gross domestic product, but it should be in terms of utility to the
community and the society in general. There is a certain inbuilt wisdom in
the statute which is the mandate of the legislature which represents the
people. The Minister has clearly failed to pay respect to the same.
Hence, the following decision:-
68. Having noted the legal position and the factual scenario, the
impugned judgment and order passed by the High Court will have to be set
aside. The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in law
for being in violation of the scheme and the provisions of Sections 89 and
89A of the Tenancy Act. The direct sale of land by Indigold to Alumina is
also held to be bad in law, and inoperative.
69. (i) In normal circumstances, the order hereafter would have been
to direct the Collector to proceed in accordance with Section 89A(5) viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the industrial activity and the production of goods and
services within the period specified. In the instant case, there is no
need of any such direction to hold an enquiry, in view of the letter of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii) Consequently, there will be an order that the land shall vest in the
State Government free from all encumbrances. This vesting order, however,
has to be on payment of appropriate compensation to the purchaser as the
Collector may determine. In the instant case, there is no need of having
this determination, for the reason that Indigold has received from Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in 2003. Neither Indigold nor
Alumina is making any grievance towards this figure or the payment thereof.
In fact, it is the case of both of them that the direct sale by Indigold
to Alumina for this amount as permitted by the State Government be held
valid. That being so, this amount of Rs. 1.20 crores would be set-off
towards the compensation which would be payable by the State Government to
the purchaser Indigold, since the land was originally purchased by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed off
by the State Government, having regard to the use of the land. The land
was supposed to be used for the industrial activity on the basis of the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed a
plant based on use of bauxite. The disposal of the land will, however, have
to be at least as per the minimum price that would be receivable at the
Government rate. In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5 has also offered to pay, without prejudice, the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores to
the State, the land will be permitted to be disposed of by the State
Government to Alumina provided Alumina pays this amount of Rs. 3.15 crores
to the State Government. This particular order is being made having
further noted that, Alumina has acted on the basis of the commitment made
to it by the Government of Gujarat in the Vibrant Gujarat Summit, and in
furtherance of the industrial development policy of the State. It is also
relevant to note that the respondent No.5 had made an application to the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four years. Mr. Ahmadi,
learned senior counsel appearing for the appellants has also submitted
that, as such, appellants are not against the development of Kutch area,
but they do want the state to follow the law and exchequer not to suffer.
In the circumstances, although we do not approve the action of the State
Government, and hold it to be clearly arbitrary and untenable, we are of
the view that the aforesaid order will be appropriate to do complete
justice in the matter.
70. In the circumstances, we pass the following orders:-
(a) The appeal is allowed in part;
(b) The impugned judgment and order passed by the High Court is set-
aside;
(c) The PIL No.44 of 2012 filed by the appellants is allowed by holding
that the order dated 18.12.2009 passed by the Government of Gujarat and by
the Collector of Kutch on 15.1.2010, are held to be arbitrary and bad in
law;
(d) In the facts and circumstances of this case, the sale of the
concerned land by Indigold to Alumina is held to be bad in law. The land
involved in the present case is held to have vested in the State of Gujarat
free from all encumbrances, and the amount of Rs. 1.20 crores paid by
Alumina to Indigold is treated as full payment towards the compensation
payable by the State to Indigold.
(e) If Alumina is interested in their proposed project, it shall pay an
amount of Rs. 3.15 crores to the Government of Gujarat within three months
hereafter. On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government. The further activities
of Alumina on the concerned parcel of land will start only after this
payment is made, and in the event the amount is not so paid within three
months hereafter, the Government will proceed to take further steps to
dispose of the land having regard to the use of the land.
(f) In the facts of the present case, there shall be no order as to
costs.
…………………………………..J.
[ H.L. Gokhale ]
……………………………………J.
[ J. Chelameswar ]
New Delhi
Dated: January 23, 2014
-----------------------
|Sr.No. |Name of Village |Survey No. |Acre/Guntha |
|1 |Kukma |94/1 |4.14 |
|2 |Kukma |94/2 |2.16 |
|3 |Moti Reldi |101/1 |9.30 |
|4 |Moti Reldi |106 |6.10 |
|5 |Moti Reldi |100/1 |2.20 |
|6 |Moti Reldi |107 |4.15 |
|7 |Moti Reldi |105/4 |5.21 |
|8 |Moti Reldi |110/2/3 |4.19 |
| | |Total |39.25 |
-----------------------
74
The Writ Petition had various prayers, but essentially it sought
to challenge the permission granted by the Collector, Bhuj, to sell certain
parcels of agricultural land situated in district Kutch, which were said to
have been purchased earlier by the respondent No.4 herein, one Indigold
Refinery Limited of Mumbai, for industrial purpose in favour of respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being impermissible
under the provisions of the Gujarat (earlier ‘Bombay’ prior to the
amendment in its application in the State of Gujarat) Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy
Act, 1958 for short).
It was submitted that under Section 89A of this Act,
agricultural land can be permitted to be sold by an agriculturist to
another person for industrial purpose provided the proposed user is bona-
fide.
In the event, the land is not so utilised by such a person for such
purpose, within the period as stipulated under the act, the Collector of
the concerned district has to make an enquiry under sub-Section 5 thereof,
give an opportunity to the purchaser with a view to ascertain the factual
situation, and thereafter pass an order that the land shall vest in the
State Government on payment of an appropriate compensation to the purchaser
which the Collector may determine.
It was contended that there was no
provision for any further transfer of agricultural land from one industrial
purchaser to any third party, once again, for industrial purpose when the
first purchaser of agricultural land had defaulted in setting up the
industry.
Apart from being in breach of the law, the transaction was stated
to be against public interest, and a mala-fide one resulting into a serious
loss to the public exchequer.
The Writ Petition criticised the role of the
Collector and the Revenue Minister of the State Government, and sought an
inquiry against them in the present case, and also a direction to the state
authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ petition
on two grounds, firstly that there was delay in initiating the said Public
Interest Litigation (PIL), and that the writ petitioner had suppressed the
material facts before the Court concerning the investment claimed to have
been made by the respondent No.5.
4. The writ petition, and now this appeal raise the issues with
respect to the underlying policy and purpose behind the relevant provisions
of the Tenancy Act, 1958.
In that connection, it also raises the issue
with respect to the duties of the revenue officers on the spot, such as the
Collector, the importance of the role of senior administrative officers of
the State Government, and whether a Minister of the Government can direct
the administrative officers and the Collector to act contrary to the
provisions and policy of the statute. =
Chapter VIII of the Tenancy Act, 1958. The sections read as follows:-
“CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to (1) Save as provided in this Act,
non-agricul-
turists barred
a) no sale (including sales in execution of a decree of
a Civil Court or for recovery of arrears of land
revenue or for sums recoverable as arrears of land
revenue), gift exchange or lease of any land or
interest therein, or
b) no mortgage of any land or interest therein, in which
the possession of the mortgaged property is delivered
to the mortgagee,
shall be valid in favour of a person who is not an agriculturist
or who being an agriculturist cultivates personally land not
less than three family holdings whether as owner or partly as
tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the
State Government in this behalf may grant permission for such
sale, gift, exchange, lease or mortgage, in such circumstances
as may be prescribed:
[Provided further that no such permission shall be granted,
where land is being sold to a person who is not an
agriculturists for agricultural purpose, if the annual income of
such person from other source exceeds five thousand rupees.]
(2) Nothing in this section shall be deemed to prohibit the
sale, gift, exchange or lease of a dwelling house or the site
thereof or any land appurtenant to it in favour of an
agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any
land or interest therein effected in favour of a co-operative
society as security for the land advanced by such society.
(4) Nothing in section 90 shall apply to any sale made under
sub-section (I).
89A. Sale of land for bonafide industrial purpose
permitted in certain cases:-
(1) Nothing in section 89 shall prohibit the sale or the
agreement for the sale of land for which no permission is
required under sub-section (1) of section 65B of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879) in favour of any person for
use of such land by such person for a bonafides industrial
purpose:
Provided that—
a) the land is not situated within the urban agglomeration as
defined in clause (n) of section 2 of the Urban Land
(Ceiling and Regulation) Act, 1976 (33 of 1976),
b) where the area of the land proposed to be sold exceeds ten
hectares, the person to whom the land is proposed to be
sold in pursuance of this sub-section shall obtain previous
permission of the Industries Commissioner, Gujarat State,
or such other officer, as the State Government may, by an
order in writing, authorise in this behalf.
c) the area of the land proposed to be sold shall not exceed
four times the area on which construction for a bonafide
industrial purpose is proposed to be made by the purchaser:
Provided that any additional land which may be required for
pollution control measures or required under any relevant
law for the time being in force and certified as such by
the relevant authority under that law shall not be taken
into account for the purpose of computing four times the
area.
d) where the land proposed to be sold is owned by a person
belonging to the Scheduled Tribe, the sale shall be subject
to the provisions of section 73AA of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879).
2) Nothing in the Section 90 shall apply to any sale made in
pursuance of subsection (1).
3) (a) Where the land is sold to a person in pursuance of sub-
section (1) (hereinafter referred to as “the purchaser”),
he shall within thirty days from the date of purchase of
the land for bonafides industrial purpose, send a notice of
such purchase in such form alongwith such other particulars
as may be prescribed, to the Collector and endorse a copy
thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and
other particulars to the Collector under clause (a) within
the period specified therein, he shall be liable to pay, in
addition to the non-agricultural assessment leviable under
this Act, such fine not exceeding two thousand rupees as
the Collector may subject to rules made under this Act,
direct.
(c) Where, on receipt of the notice of the date or
purchase for the use of land for a bonafides industrial
purpose and other particulars sent by the purchaser under
clause (a), the Collector, after making such inquiry as he
deems fit—
(i) is satisfied that the purchaser of such land has
validly purchased the land for a bonafide industrial
purpose in conformity with the provisions of sub-section
(1), he shall issue a certificate to that effect to the
purchaser in such form and with in such time as may be
prescribed.
(ii) is not so satisfied, he shall, after giving the
purchaser an opportunity of being heard, refuse to issue
such certificate and on such refusal, the sale of land to
the purchaser shall be deemed to be in contravention of
section 89.
(d) (i) The purchaser aggrieved by the refusal to issue a
certificate by the Collector under sub-clause (ii) of
clause (c) may file an appeal to the State Government or
such officer, as it may, by an order in writing, authorise
in this behalf.
(ii) The State Government or the authorised officer shall,
after giving the appellant an opportunity of being heard,
pass such order on the appeal as it or he deems fit.
4) The purchaser to whom a certificate is issued under sub-
clause (i) of clause (c) of sub-section (3), shall commence
industrial activity on such land within three years from
the date of such certificate and commence production of
goods or providing of services within five years from such
date:
Provided that the period of three years or, as the case may be,
five years may, on an application made by the purchaser in that
behalf, be extended from time to time, by the State Government
or such officer, as it may, by an order in writing authorise in
this behalf, in such circumstances as may be prescribed.
(5) Where the Collector, after making such inquiry as he deems
fit and giving the purchaser an opportunity of being heard,
comes to a conclusion that the purchaser has failed to
commence industrial activity or production of goods or
providing of services within the period specified is clause
(b) of sub-section (4), or the period extended under the
proviso to that clause, the land shall vest in the State
Government free from all encumbrances on payment to the
purchaser of such compensation as the Collector may
determine, having regard to the price paid by the purchaser
and such land shall be disposed of by the State Government,
having regard to the use of land.”
68. Having noted the legal position and the factual scenario, the
impugned judgment and order passed by the High Court will have to be set
aside. The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in law
for being in violation of the scheme and the provisions of Sections 89 and
89A of the Tenancy Act.
The direct sale of land by Indigold to Alumina is
also held to be bad in law, and inoperative.
69. (i) In normal circumstances, the order hereafter would have been
to direct the Collector to proceed in accordance with Section 89A(5) viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the industrial activity and the production of goods and
services within the period specified.
In the instant case, there is no
need of any such direction to hold an enquiry, in view of the letter of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii) Consequently, there will be an order that the land shall vest in the
State Government free from all encumbrances. This vesting order, however,
has to be on payment of appropriate compensation to the purchaser as the
Collector may determine.
In the instant case, there is no need of having
this determination, for the reason that Indigold has received from Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in 2003.
Neither Indigold nor
Alumina is making any grievance towards this figure or the payment thereof.
In fact, it is the case of both of them that the direct sale by Indigold
to Alumina for this amount as permitted by the State Government be held
valid.
That being so, this amount of Rs. 1.20 crores would be set-off
towards the compensation which would be payable by the State Government to
the purchaser Indigold, since the land was originally purchased by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed off
by the State Government, having regard to the use of the land.
The land
was supposed to be used for the industrial activity on the basis of the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed a
plant based on use of bauxite.
The disposal of the land will, however, have
to be at least as per the minimum price that would be receivable at the
Government rate.
In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5 has also offered to pay, without prejudice, the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores to
the State, the land will be permitted to be disposed of by the State
Government to Alumina provided Alumina pays this amount of Rs. 3.15 crores
to the State Government.
This particular order is being made having
further noted that, Alumina has acted on the basis of the commitment made
to it by the Government of Gujarat in the Vibrant Gujarat Summit, and in
furtherance of the industrial development policy of the State.
It is also
relevant to note that the respondent No.5 had made an application to the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four years.
Mr. Ahmadi,
learned senior counsel appearing for the appellants has also submitted
that, as such, appellants are not against the development of Kutch area,
but they do want the state to follow the law and exchequer not to suffer.
In the circumstances, although we do not approve the action of the State
Government, and hold it to be clearly arbitrary and untenable, we are of
the view that the aforesaid order will be appropriate to do complete
justice in the matter.
70. In the circumstances, we pass the following orders:-
(a) The appeal is allowed in part;
(b) The impugned judgment and order passed by the High Court is set-
aside;
(c) The PIL No.44 of 2012 filed by the appellants is allowed by holding
that the order dated 18.12.2009 passed by the Government of Gujarat and by
the Collector of Kutch on 15.1.2010, are held to be arbitrary and bad in
law;
(d) In the facts and circumstances of this case, the sale of the
concerned land by Indigold to Alumina is held to be bad in law. The land
involved in the present case is held to have vested in the State of Gujarat
free from all encumbrances, and the amount of Rs. 1.20 crores paid by
Alumina to Indigold is treated as full payment towards the compensation
payable by the State to Indigold.
(e) If Alumina is interested in their proposed project, it shall pay an
amount of Rs. 3.15 crores to the Government of Gujarat within three months
hereafter. On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government. The further activities
of Alumina on the concerned parcel of land will start only after this
payment is made, and in the event the amount is not so paid within three
months hereafter, the Government will proceed to take further steps to
dispose of the land having regard to the use of the land.
(f) In the facts of the present case, there shall be no order as to
costs.
2014 ( January - Vol - 1) Judis.nic.in/ S.C./ file name =41172
H.L. GOKHALE, J. CHELAMESWAR
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL N. 836 OF 2014
(@ out of SPECIAL LEAVE PETITION (CIVIL) NO.36738/2012)
Dipak Babaria & Anr. … Appellants
Versus
State of Gujarat & Ors. … Respondents
J U D G E M E N T
H.L. Gokhale J.
Leave Granted.
2. This appeal by Special Leave seeks to challenge the judgment
and order dated 30.8.2012 rendered by a Division Bench of the Gujarat High
Court dismissing Writ Petition (PIL) No.44 of 2012 filed by the appellants
herein.
The Writ Petition had various prayers, but essentially it sought
to challenge the permission granted by the Collector, Bhuj, to sell certain
parcels of agricultural land situated in district Kutch, which were said to
have been purchased earlier by the respondent No.4 herein, one Indigold
Refinery Limited of Mumbai, for industrial purpose in favour of respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being impermissible
under the provisions of the Gujarat (earlier ‘Bombay’ prior to the
amendment in its application in the State of Gujarat) Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy
Act, 1958 for short).
It was submitted that under Section 89A of this Act,
agricultural land can be permitted to be sold by an agriculturist to
another person for industrial purpose provided the proposed user is bona-
fide.
In the event, the land is not so utilised by such a person for such
purpose, within the period as stipulated under the act, the Collector of
the concerned district has to make an enquiry under sub-Section 5 thereof,
give an opportunity to the purchaser with a view to ascertain the factual
situation, and thereafter pass an order that the land shall vest in the
State Government on payment of an appropriate compensation to the purchaser
which the Collector may determine.
It was contended that there was no
provision for any further transfer of agricultural land from one industrial
purchaser to any third party, once again, for industrial purpose when the
first purchaser of agricultural land had defaulted in setting up the
industry.
Apart from being in breach of the law, the transaction was stated
to be against public interest, and a mala-fide one resulting into a serious
loss to the public exchequer.
The Writ Petition criticised the role of the
Collector and the Revenue Minister of the State Government, and sought an
inquiry against them in the present case, and also a direction to the state
authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ petition
on two grounds, firstly that there was delay in initiating the said Public
Interest Litigation (PIL), and that the writ petitioner had suppressed the
material facts before the Court concerning the investment claimed to have
been made by the respondent No.5.
4. The writ petition, and now this appeal raise the issues with
respect to the underlying policy and purpose behind the relevant provisions
of the Tenancy Act, 1958.
In that connection, it also raises the issue
with respect to the duties of the revenue officers on the spot, such as the
Collector, the importance of the role of senior administrative officers of
the State Government, and whether a Minister of the Government can direct
the administrative officers and the Collector to act contrary to the
provisions and policy of the statute.
The Secretary of the Department of
Revenue of the Government of Gujarat, and the Collector of District Kutch
at Bhuj are joined as respondent Nos. 2 and 3 to this appeal.
The facts leading to this appeal are as follows:-
5. It is pointed out by the appellants that the respondent No.4
Indigold Refinery Ltd. (Indigold for short) which is a company having its
office in Mumbai, purchased eight parcels of land owned by one Virji Jivraj
Patel and Jayaben Virji Patel residing at Bankers Colony, Bhuj, admeasuring
in all 39 acres and 25 gunthas (i.e. roughly 40 acres) by eight sale deeds
all dated 30.1.2003, for a consideration of about Rs.70 lakhs.
These eight
sale deeds are supposed to have been signed for respondent No.4 Indigold by
one Hanumantrao Vishnu Kharat, its Chairman-cum-Managing Director. The
lands are situated in villages Kukma and Moti Reldi in the district of
Kutch.
The sale deeds indicated that the purchaser had purchased these
lands for industrial purpose, and that the purchaser will obtain the
permission from the Deputy Collector, Bhuj for purchasing the said land
within one month from the date of those sale deeds.
The respondent No.4 is
said to have applied for the necessary permission under Section 89A of the
Tenancy Act, 1958 on 31.1.2003, and the Collector of Bhuj is stated to have
given the requisite certificate of purchase of the lands under sub-section
(3) (c) (i) of the said section.
It appears that thereafter no steps were
taken by respondent No.4 to put up any industry on the said land.
6. Five years later, the respondent No.4 is stated to have applied
on 6.12.2008 to the Deputy Collector at Bhuj for permission to sell these
lands. The Collector of Bhuj sought the guidance from the Revenue
Department, and in view of the direction of the Revenue Department, the
Deputy Collector granted the permission on 15.1.2010, to sell the lands to
respondent No. 5 treating it as a special case, and not to be treated as a
precedent.
Thereafter, the respondent No.4 conveyed the concerned lands to
respondent No.5 by sale deed dated 19.1.2010. Respondent No.5 also obtained
permission from the Industries Commissioner on 8.3.2010 for putting up the
industry. Subsequently, the Collector issued the certificate as required
under Section 89A (3) (c) (i) of the Tenancy Act, 1958, on 21.5.2010, that
respondent No.5 had purchased the land for a bona-fide purpose.
The
permission for a non-agricultural user was given to the respondent No.5 on
5.1.2011.
The Gujarat Mineral Development Corporation (GMDC) – which got
itself impleaded in this appeal as respondent No.6 has entered into a
Memorandum of Understanding (MOU for short) on 30.11.2011 with M/s Earth
Refinery Pvt. Ltd. which is the holding company of respondent No.5 to
purchase 26% of equity in a joint venture company to be set up by them, and
which will own the industry.
7. It appears that a Gujarati Daily “Sandesh” in an article dated
20.8.2011 reported that there was a huge loss to the State exchequer in the
sale of these lands to a private company almost to the tune of Rs.250
crores.
The newspaper reported that although the respondent No.4 had
purchased the concerned lands at village Kukma and Moti Reildi on
30.1.2003, no industrial activity was started till 2008 as required by the
law, and after a long period of five years the land was to be sold to
Alumina Refinery Limited (Alumina for short).
One Mr. Nitin Patel is the
Managing Director of this Alumina, and Mr. Nilesh Patel who is his brother
is its Director (Legal and Human Resources).
The newspaper stated that
Alumina had written a letter to the Chief Minister Mr. Narendra Modi, on
18.6.2009 that the Government should grant the necessary permission. It is
further stated that on the said proposal being placed before them, the
officers of the Revenue Department had placed negative remarks, and yet a
permission was granted to sell 2 lakh sq. yds. of land at a throw away
price when the rate of land was Rs.3500 – 4000 per sq. yd.. It was alleged
that there was a direct involvement of the Chief Minister in this scam, and
with a view to avoid Lokayukata enquiry, although a commission was
appointed under Hon’ble Mr. Justice M.B. Shah, a former Judge of Supreme
Court of India to enquire into a number of other controversial projects,
this scam was excluded therefrom.
8. There was also a news item in another Daily “Kachchh Mitra” on
1.2.2011 that the Alumina Refinery Limited was given permission by
breaching rules and regulations. The farmers of the nearby villages were
worried, and some 200 farmers had protested against the proposal as it
would affect their agricultural activities due to pollution. It was stated
that they had sowed plants of tissue-culture Israeli dry-dates. They had
planted lacs of Kesar Mango trees. They were also cultivating crops of
Papaiya, Aranda, Wheat, Cotton, groundnuts etc. If the refinery work
starts in this area, it will affect the agricultural work badly. There was
also a fear that the blackish and toxic air of the factory will spoil the
plants.
9. All this led the appellants to file the earlier mentioned writ
petition, for the reliefs as prayed. The petition enclosed the above
referred news reports, as also the information obtained through enquiry
under the Right to Information Act, 2005 by one Shri Shashikant Mohanlal
Thakker of Madhapur Village of Taluka Bhuj. This information contained the
documents incorporating the file notings of the revenue department and the
orders granting permission. The aforesaid writ petition was filed on
28.2.2012. An affidavit in reply to the writ petition was filed by above
referred Nitin Patel on behalf of respondent No.5, and the appellants filed
a rejoinder. Respondent No.5 filed a sur-rejoinder thereto. The respondent
No.1 State of Gujarat filed an affidavit in reply on 16.8.2012, and the
petitioner filed a rejoinder to the Government’s affidavit on 10.11.2012.
After the writ petition was filed on 28.2.2012 an order of status-quo was
granted on 1.3.2012, and it continued till the dismissal of the petition on
30.8.2012 when the order of stay was vacated. However, when the present
SLP was filed, an order of status-quo was granted by this Court on
4.1.2013, and it has continued till date.
Relevant provisions of the Statute:-
10. In as much as we are concerned with the provisions contained in
Section 89 and Section 89A of the Tenancy Act, 1958, it is necessary to
reproduce the two sections in their entirety. These two sections appear in
Chapter VIII of the Tenancy Act, 1958. The sections read as follows:-
“CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to (1) Save as provided in this Act,
non-agricul-
turists barred
a) no sale (including sales in execution of a decree of
a Civil Court or for recovery of arrears of land
revenue or for sums recoverable as arrears of land
revenue), gift exchange or lease of any land or
interest therein, or
b) no mortgage of any land or interest therein, in which
the possession of the mortgaged property is delivered
to the mortgagee,
shall be valid in favour of a person who is not an agriculturist
or who being an agriculturist cultivates personally land not
less than three family holdings whether as owner or partly as
tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the
State Government in this behalf may grant permission for such
sale, gift, exchange, lease or mortgage, in such circumstances
as may be prescribed:
[Provided further that no such permission shall be granted,
where land is being sold to a person who is not an
agriculturists for agricultural purpose, if the annual income of
such person from other source exceeds five thousand rupees.]
(2) Nothing in this section shall be deemed to prohibit the
sale, gift, exchange or lease of a dwelling house or the site
thereof or any land appurtenant to it in favour of an
agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any
land or interest therein effected in favour of a co-operative
society as security for the land advanced by such society.
(4) Nothing in section 90 shall apply to any sale made under
sub-section (I).
89A. Sale of land for bonafide industrial purpose
permitted in certain cases:-
(1) Nothing in section 89 shall prohibit the sale or the
agreement for the sale of land for which no permission is
required under sub-section (1) of section 65B of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879) in favour of any person for
use of such land by such person for a bonafides industrial
purpose:
Provided that—
a) the land is not situated within the urban agglomeration as
defined in clause (n) of section 2 of the Urban Land
(Ceiling and Regulation) Act, 1976 (33 of 1976),
b) where the area of the land proposed to be sold exceeds ten
hectares, the person to whom the land is proposed to be
sold in pursuance of this sub-section shall obtain previous
permission of the Industries Commissioner, Gujarat State,
or such other officer, as the State Government may, by an
order in writing, authorise in this behalf.
c) the area of the land proposed to be sold shall not exceed
four times the area on which construction for a bonafide
industrial purpose is proposed to be made by the purchaser:
Provided that any additional land which may be required for
pollution control measures or required under any relevant
law for the time being in force and certified as such by
the relevant authority under that law shall not be taken
into account for the purpose of computing four times the
area.
d) where the land proposed to be sold is owned by a person
belonging to the Scheduled Tribe, the sale shall be subject
to the provisions of section 73AA of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879).
2) Nothing in the Section 90 shall apply to any sale made in
pursuance of subsection (1).
3) (a) Where the land is sold to a person in pursuance of sub-
section (1) (hereinafter referred to as “the purchaser”),
he shall within thirty days from the date of purchase of
the land for bonafides industrial purpose, send a notice of
such purchase in such form alongwith such other particulars
as may be prescribed, to the Collector and endorse a copy
thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and
other particulars to the Collector under clause (a) within
the period specified therein, he shall be liable to pay, in
addition to the non-agricultural assessment leviable under
this Act, such fine not exceeding two thousand rupees as
the Collector may subject to rules made under this Act,
direct.
(c) Where, on receipt of the notice of the date or
purchase for the use of land for a bonafides industrial
purpose and other particulars sent by the purchaser under
clause (a), the Collector, after making such inquiry as he
deems fit—
(i) is satisfied that the purchaser of such land has
validly purchased the land for a bonafide industrial
purpose in conformity with the provisions of sub-section
(1), he shall issue a certificate to that effect to the
purchaser in such form and with in such time as may be
prescribed.
(ii) is not so satisfied, he shall, after giving the
purchaser an opportunity of being heard, refuse to issue
such certificate and on such refusal, the sale of land to
the purchaser shall be deemed to be in contravention of
section 89.
(d) (i) The purchaser aggrieved by the refusal to issue a
certificate by the Collector under sub-clause (ii) of
clause (c) may file an appeal to the State Government or
such officer, as it may, by an order in writing, authorise
in this behalf.
(ii) The State Government or the authorised officer shall,
after giving the appellant an opportunity of being heard,
pass such order on the appeal as it or he deems fit.
4) The purchaser to whom a certificate is issued under sub-
clause (i) of clause (c) of sub-section (3), shall commence
industrial activity on such land within three years from
the date of such certificate and commence production of
goods or providing of services within five years from such
date:
Provided that the period of three years or, as the case may be,
five years may, on an application made by the purchaser in that
behalf, be extended from time to time, by the State Government
or such officer, as it may, by an order in writing authorise in
this behalf, in such circumstances as may be prescribed.
(5) Where the Collector, after making such inquiry as he deems
fit and giving the purchaser an opportunity of being heard,
comes to a conclusion that the purchaser has failed to
commence industrial activity or production of goods or
providing of services within the period specified is clause
(b) of sub-section (4), or the period extended under the
proviso to that clause, the land shall vest in the State
Government free from all encumbrances on payment to the
purchaser of such compensation as the Collector may
determine, having regard to the price paid by the purchaser
and such land shall be disposed of by the State Government,
having regard to the use of land.”
The pleadings of the parties before the High Court:-
11. The appellants had contended in paragraph 6 of their Writ
Petition that the permission given to Indigold to sell the land was
contrary to the provisions and restrictions imposed under the law, and
contrary to the original permission granted to them by the Deputy
Collector, Bhuj, on 1.5.2003. The market value of the land in question goes
into crores of rupees, and such an act will result in huge loss to the
public exchequer. They had contended that the decision was malafide. The
decision was alleged to have been taken for a collateral purpose, which was
apparently neither legal nor in the interest of the administration and
public interest. Inasmuch as it was concerning disposal of public
property, the only mode to be adopted was a fair and transparent procedure
which would include holding a public auction inviting bids, and thereby
providing equal opportunity to all interested or capable industries, in
order to promote healthy competition and to fetch the right market price.
The decision has been taken at the instance of the Hon’ble Revenue
Minister. It was also submitted that, there were possibilities that the
directors / promoters and the management of Indigold and Alumina are the
same, and if that is so, it would be a design to defraud the Government.
Alumina had contended that it had signed an MOU with the State Government
during the Vibrant Gujarat Investors’ Summit, 2009. The appellants had
submitted that the same cannot be a ground to grant the permission to sell,
contrary to the mandatory provisions of law. Section 89A makes a contingent
provision in case the land is not used for industrial activity within the
time provided, and such mandatory provisions of the Act cannot be bypassed
merely upon the endorsement made by the Hon’ble Revenue Minister. The
action on the part of the State is absolutely arbitrary. The State or a
public authority which holds the property for the public, and which has the
authority to grant the largesse, has to act as a trustee of the people, and
therefore to act fairly and reasonably. The holders of pubic office are
ultimately accountable to the public in whom the sovereignty vests. The
action of the Government is arbitrary, and therefore violative of Article
14 of the Constitution of India.
12. Respondent No.5 was the first to file a reply to this petition
in the High Court which was affirmed by Mr. Nitin Patel on 11.7.2009. In
this reply he principally submitted that it was not correct to say that the
land was being given away at a throwaway price, causing great loss to the
public exchequer to the tune of Rs.250 crores, as alleged. The State
Authorities and the Revenue Minister have not acted in violation of any
mandatory provisions of law. The affidavit further narrated the various
events in the matter leading to the sale deed dated 19.1.2010 by Indigold
in favour of Alumina, and the permission of the Industries Commissioner
dated 8.3.2010. It was also pointed out that permission had been granted
by the Collector, Bhuj on 5.1.2011. Thereafter, it was contended that the
land has been purchased by the respondent No.5 way back in January 2010,
and the petition, making frivolous and baseless allegations, has been filed
two years after the said transaction.
13. Then, it was pointed out that the respondent No.5 was
incorporated under the Companies Act in the year 2008, and that the company
is promoted by Earth Refining Company Pvt. Limited. Respondent No.5 wanted
to manufacture high value added products from bauxite ore available in
Kutch district which ore was currently sold or exported as it is without
any value addition. The intention of respondent No.5 was in line with and
supported by Government of Gujarat Industries and Mines Policies, 2009.
The project was to be first of its kind in Gujarat, with technology
supplied to it by National Aluminum Company Ltd. (shortly known as NALCO),
a Government of India Enterprise. A share holding agreement dated
30.11.2011 had been entered into between GMDC and Earth Refining Company
Ltd. whereby GMDC had agreed to be joint venture partner, and to subscribe
to 26% of the equity share capital of the new company. NALCO has provided
advanced technology for the project.
14. It was further submitted in para 15 (g) of the reply that, the
opinions of all the subordinate officers are “inconsequential and not
binding on the Revenue Minister”. The decision of the Minister cannot be
faulted on the basis of certain notings of a lower authority.
15. One Mr. Hemendera Jayantilal Shah, Additional Secretary,
Revenue Department filed the reply on behalf of the respondent-State. In
paragraph 3.4 it was contended that the notings from the Government files
reflect only the exchange of views amongst the officers of the departments.
The decision of the State Government to grant permission for sale of the
land could not be said to be arbitrary, malafide or in the colourable
exercise of power. Three reasons were given in support thereof:-
(i) If the land had been directed to be vested in the State Government,
State would have been required to pay compensation to M/s Indigold under
Section 89A(5) which is otherwise a long-drawn process involving Chief Town
Planner and State Level Valuation Committee, for the purpose of determining
the valuation of the land, and thereafter for finding the suitable and
interested party to set up an industry on the land in question.
(ii) In the sale to Alumina, the State Government’s own interest through
its public sector undertaking had been involved, and therefore there has
been a substantial compliance of the spirit flowing from the provisions of
Section 89A(5).
(iii) The price of the land in question was around Rs.4.35 crores as per
the Jantri (i.e. official list of land price) at the relevant time, and it
had come down to Rs.2.08 crores, as per the revised Jantri rated of 2011.
Thus, apart from time being consumed in the process, perhaps there would
have been a loss to the public exchequer. Thereafter, it was stated in
paragraph 4 of the reply as follows:-
“I further respectfully say that the action of the State
Government was bonafide and taking into consideration all the
aspects of the matter, viz. (i) the land is being used for the
industrial purpose, (ii) a dire need for industrialization in
the Kutch District; (iii) MoU arrived at during the Vibrant
Summit, 2009, whereby, a ready and interested party was
available to start the industry immediately on the land in
question; and (iv) GMDC possessing 26% of the share in such
interested party, i.e. M/s Alumina Refinery Pvt. Ltd.”
It is relevant to note that no reply was filed on behalf of Indigold.
Additional pleadings of the parties in this Court:-
16. As far as this Court is concerned, a counter affidavit was
filed on behalf of the State Government by one Mr. Ajay Bhatt, Under
Secretary, Land Reforms. In his reply, he stated that in any event in the
present process the State is the beneficiary in permitting this transaction
with GMDC which is a Government Undertaking. It will have 26% stock in
respondent No.5. In paragraph 4(E)(e)(ii) he stated that since the
Government’s own interest was involved, there has been a substantial
compliance of the spirit flowing from the provisions of Section 89A(5) of
the Act.
17. A counter was also filed in this Court by one Mr. Deepak
Hansmukhlal Gor, Vice President of respondent No.5-Alumina. He pointed out
that although the petition in the High Court was moved as a PIL, the
petitioner No.1 was in fact a leader of the opposition party in the State.
In order to mislead the Court it was stated in the petition that the land
was worth Rs.250 crores. It was further submitted that to seek an interim
relief a false statement had been made in the writ petition that no
activity had been initiated by respondent No.5 on the concerned land by the
time writ petition was filed. The respondent No.5 had made substantial
investment and construction on the land, and photographs in that behalf
were placed on record. It was also submitted that the decision of the
State Government was in tune with Mineral Development Policy, 2008 of the
Government of India and Gujarat Mineral Policy, 2003. It was then pointed
out that apart from other controversies, the present controversy has also
been included for the consideration of Hon’ble Mr. Justice M.B. Shah,
Former Judge of this Court. The sale of land in the present case was
rightly considered as a special one, and the challenge thereto was highly
unjustified and impermissible. The respondent No.5 filed various documents
thereafter, including the various permissions obtained by respondent No.5
for the project and the technology supply agreement entered into between
NALCO and M/s Earth Refining Company Ltd. It was submitted that the
Respondent No. 5 is a bona-fide purchaser of the land, and in any case it
should not be made to suffer for having invested for industrial
development. It is claimed that Respondent No. 5 has made an investment to
the tune of Rs 6.85 crores as on 31.3.2012 on the project, and moved in
some machinery on the site.
18. The appellant No.1 has filed his rejoinder to both these
counters. He has stated that he has not suppressed that he is a political
activist, which is what he has already stated in the petition. He has
maintained his earlier submissions in the writ petition, and denied the
allegations made in the two counter affidavits.
19. As stated earlier, GMDC has applied for joining as respondent
No.6. In its application it has stated that Alumina was selected through
transparent evaluation. Then, it was short-listed for setting up the
project in Kutch at the Vibrant Gujarat Summit in 2009. It also defended
the Government’s decision on the ground that it is going to have 26% equity
in respondent No.5.
Points for consideration before this Court:
20. It, therefore, becomes necessary for this Court to examine
whether the decision taken by the Government to permit the transfer of the
agricultural land from respondent No. 4 to respondent No. 5, was legal and
justified.
For that purpose one may have to consider the developments in
this matter chronologically as disclosed from the above pleadings of the
parties, as well as from the material available from the Government files
placed for the perusal of the Court.
Thereafter, one will have to see the
scheme underlying Sections 89 and 89A, and then examine
whether there has
been any breach thereof, and if it is so what should be the order in the
present case?
Material on record and the material disclosed from the files of the
Government and the Collector:-
21. The respondents have contended that the sale transaction
between respondent Nos.4 and 5 took place because of the financial
constraints faced by respondent No.4 Indigold Refinery Limited, and that is
reflected in their letter dated 16.6.2009 addressed to the Collector, Bhuj.
The letter-head of the respondent No.4 shows that it claims to have a gold
refinery at Chitradurg in State of Karnataka. This letter refers to their
earlier letter dated 6.12.2008, and letter dated 12.6.2009 from respondent
No.5 Alumina. The relevant paragraph of letter dated 16.6.2009 reads as
follows:-
“……..
• With regret we have hereby to inform you that due to financial
constraints on our part we are unable to execute our proposed
refinery project on the said land. We are well aware of the
fact that sufficient amount of time has passed from the date of
permission granted by the office of Deputy Collector-Bhuj to set
up the project. We have tried our level best to set up the
industry on the land in question.”
• M/s Alumina Refinery (P) Ltd. having their registered office in
Mumbai has shown keen interest to set their Alumina Refinery
Project on our above mentioned ownership land.
• A copy of consent letter dated 12.06.2009 has already been sent
to your office by M/s Alumina Refinery (P) Ltd., whereby they
have applied to avail the permission to purchase our above
ownership land u/s 89.
• We appreciate and are thankful to your office and Government of
Gujarat for giving us an opportunity to purchase and set up of
our then proposed refinery project on the above mentioned
agricultural land.
• We would like to confirm that we had a clear intention to set up
industry on the above mentioned land, it is only because of non
availability of monetary fund we are not in a position to set up
our industry on the above mentioned agricultural land. Further,
we are also not having any intention to take any undue advantage
in form of booking any profit by sale of ownership land to M/s
Alumina Refinery (P) Ltd.
We, hereby request your office to kindly grant the permission to
sale all the above land and allow us to execute the Sale Deed for
registration with the competent authority…..”
(emphasis supplied)
22. The earlier letter dated 6.12.2008 mentioned in this letter of
16.6.2009, however, nowhere mentions that respondent No.4 had any financial
constraints because of which it could not set up the industry and thefore
it wanted to sell the particular land. This letter is seen in the file of
the Collector. This letter reads as follows:-
“INDIGOLD REFINERIES LIMITED
6th December 2008
To,
Collector of Kutch,
Bhuj, State of Gujarat
Sub:- Permission for the sale of agricultural land admeasuring 39
acres 25 gunthas at Moti Reladi Kukama, Taluka Bhuj, District Kutch,
State of Gujarat.
Dear Sir,
Reference to above, we have to respectfully inform your good self that
we had purchased land as per details here below for setting up of
Industrial project:-
Sr.no. Name of Village Survey No. Measurement
Acres and gunthas
1. Kukama 94/1 4/14
2. Kukama 94/2 2/16
3. Moti Reladi 101/1 9/30
4. “ 106 6/10
5. “ 100/1 2/20
6. “ 107 4/15
7. “ 105/4 5/21
8. “ 110/2/3 4/16
Total 39 acres 25 gunthas
The above piece of land was purchased with the permission granted by
Deputy Collector, Bhuj, Kutch, wide letter no. LND/VC/1169/03 dated
2nd May 2003. We further respectfully inform yourself that we are no
more interested to put any industrial project in the said land and
therefore we are disposing off entire piece of land as per aforesaid
details to our prospective client. We, therefore, request your good
self to kindly give us your permission for sale, so as to enable us to
register the sale deed with the concern competent authority.
We hope you will extend your maximum corporation and assistances in
this regard and oblige.
Thanking you
Yours faithfully
Sd/-
Indigold Refineries Ltd.
Hanumantrao V. Kharat”
(emphasis supplied)
23. As stated earlier, the File notings of the Revenue Department,
were obtained through an RTI inquiry, and were placed on record alongwith
the Writ Petition. The learned counsel for the State of Gujarat was good
enough to produce the original files for our perusal. In the file of the
Revenue Department, there is an Email dated 1.7.2009 from Shri Nitin Patel,
Chairman & MD of respondent No.5 forwarding his letter dated 30.6.2009
addressed to Smt. Anandiben M. Patel, Hon’ble Minister of Revenue recording
the minutes of the meeting held in her office on 29.6.2009. Immediately
thereafter, the respondent No.5 has written a letter to the Chief Minister
of Gujarat seeking permission to purchase these lands. The Secretary to the
Chief Minister, Shri A.K. Sharma has then sent a letter on 2.7.2009 to the
Principal Secretary, Revenue Department informing him that Shri Nitin
Patel, of respondent No.5, had approached them with their representation
dated 18.6.2009. It had inked an MOU during the Vibrant Gujarat Global
Summit for establishing an Alumina Refinery, and they had identified a land
suitable for that purpose. This letter further stated:
“On verification of the issue, necessary action may kindly
be taken at the earliest. In the meantime, a brief note
indicating the possible course of action may please be sent to
this office.”
24. In view of this note from the Secretary to the Chief Minister,
the Revenue Department sought the factual report from the Collector by
their letter dated 6.7.2009. What we find however, is that instead of
sending a factual report, the Collector fowarded the original proposal of
respondent No.5 itself to the Department, and sought their decision thereon
in favour of Alumina through his letter dated 31.7.2009. Thereafter, we
have the note dated 7.8.2009 in the Government file which is signed by then
Section Officer and Under Secretary, Land Revenue. This note refers to the
fact that a letter dated 2.7.2009 had been received from the Secretary to
the Chief Minister. Thereafter, a letter dated 31.7.2009 had been received
from the Collector, Kutch stating that respondent No.4 had purchased the
concerned land admeasuring 39 acres and 25 guntas, but no industrial use
had been made, and that the respondent No.5 had shown his willingness to
purchase the land. Thereafter, the note records what the Collector had
stated viz.
“Taking into consideration the reasons shown in the
submission of Alumina Refinery Company addressed to the Hon’ble
C.M., dated 18.6.2009, it is submitted to grant permission for
purchasing land”.
25. The departmental note thereafter states in sub-paragraph A, B,
C of paragraph 4, that under the relevant law the purchaser of the land
should commence the industrial activity within a period of 3 years from
date of the certificate of purchase, and within 5 years start the
manufacture of goods and provide the services. Where the purchaser fails
to commence the industrial activity, the Collector has to initiate an
enquiry as to whether the purchaser has failed to commence industrial
activity or production, as mentioned in clause (b) of sub-section 4.
Thereafter, if on giving the purchaser an opportunity to be heard, the
Collector comes to a conclusion that the purchaser has failed to do so, he
has to determine the payment of compensation, and pass an order that the
land shall vest in the State Government. Thereafter the note records:-
“ …..Taking into consideration the above provisions,
whatever action required to be taken, is to be taken by
Collector, Kutch, means there is no question at all of the
authority for a period of more than five years. Further vide
letter dated 6.7.2009, Collector was informed to submit factual
report. Instead of the same, proposal is submitted by him.
Vide order dated 1.5.2003 Deputy Collector has granted
permission to Indigold Refinery Company under Section-89 of the
T.A. with regard to the lands in question. The time limit of
this permission has come to an end. Now another company,
Alumina Refinery Co. wants to purchase land of this company and
establish a project. Looking to the same, taking into
consideration the above provisions, whatever action is required
to be taken, the same is to be taken at his (Collector) level
only. This is submitted for consideration whether to inform
Collector accordingly or not?
As Collector is required to take action as per the legal
provisions, any action on proposal of Collector is not required
to be taken by this office. Therefore, proposal of the
Collector be sent back.
Submitted respectfully…”
(emphasis supplied)
26. Since, the Secretary of the Hon’ble Chief Minister had sought a
note indicating the possible course of action, the Deputy Secretary, Land
Revenue made a note on 25.8.2009, and at the end thereof, he stated as
follows:-
“..……
Under these circumstances, looking to legal provisions,
there is a provision that either the company carries out the
industrial activity or the State Government resumes the land.
There is no provision for mutual transfer by the parties.
As suggested by the Secretary to the Hon’ble C.M., note
indicating the above position be sent separately.”
27. A note was, thereafter, made by the Principal Secretary, Land
Revenue, which recorded that as per existing policy such sale was not
permissible. In para 2 of his note he stated:
“as per rules, the land is to be resumed by Collector in
case of failure to utilize for industrial use”. In para 5
thereof he however suggested “that in such case, as in cases
under the Land Acquisition Act, 50% of the unearned income being
required to be charged by the State Government can be introduced
as a policy measure”.
The Principal Secretary, Revenue Department marked para 2 above as “A” and
then remarked on 29.8.2009 as follows:-
“We may resume as “A” of pre-page and allot as per the
existing policy on land price”.
The Chief Secretary wrote thereon on 1.9.2009 –
“We should take back the land. Allotment may be separately
examined”.
What is relevant to note is that the Minister of Revenue Smt. Anandiben
Patel thereafter put a remark on 10.9.2009:-
“Land is of private ownership. As a special case,
permission be granted for sale”.
28. Thereafter, it is seen from this file that in view of this
direction by the Minister, the matter was further discussed. A note was
then made by the Principal Secretary, Revenue Department on 21.9.2009 -
“Discussed. We may resubmit to adopt a procedure for such cases”. The
Principal Secretary, Land Revenue made a detailed note thereafter on
14.10.2009 referring to the amendment brought in by Gujarat Act No.7 of
1997 incorporating Section 63AA in the Bombay Tenancy and Agricultural
Lands Act, 1948, and the developments in the present matter up to the
noting made by the Minister, that the land may be permitted to be sold as a
special case. Thereafter, he sought an opinion as to whether or not an
action similar to a provision under the Land Acquisition Act on the
occasion of sale of land providing for taking of 50% amount of unearned
income by the State Government, be taken in the present case. The Chief
Secretary made a note thereon as follows:-
“It would be proper to give land to the new party provided
industry department recommends as per the laid down rules. As
indicated in page 9/D note (marginal). Let us take back land
under 63AA and then re-allot to the new party”.
15.10
The Minister still made a note thereon on 4.11.2009:-
“As a special case as suggested earlier, permission for
sale be given”.
In view of this direction by the minister, the department has, thereafter,
taken the decision that the permission be given as a special case but not
to be treated as precedent. Thus, the opinion of the Principal Secretary,
Land Revenue that 50% of the unearned income be taken by the Government was
not accepted. Similarly, the opinion of the Chief Secretary that the land
be resumed, and then be re-allotted to the new party was also not accepted.
29. This has led to the communication from the State Government to
the Collector dated 18.12.2009 that the Government had granted the
necessary permission to respondent No.5 to purchase the land, treating it
as a special case. The said letter reads as follows:-
“Urgent/RPAD
Sr. No.: GNT/2809/2126/Z State of Gujarat
Revenue Department
11/3 Sardar Bhavan
Sachivalay
Gandhinagar
Date: 18/12/2009
To,
The Collector
Kutch-Bhuj
Subject: Shri Nitin Patel c/o M/s Indigold Refinery/Alumina
Representation qua the land of Kukma and Moti Reldi
Reference: Your letter dated 31/9/09 bearing no. PKA-3-
Land- Vs. 2083/2009
Sir,
In connection with your above referred and subject letter, the
land of Kukma and Moti Reldi admeasuring Acre 39 Guntha 25 was
purchased by Indigold Refinery as per the provisions of Bombay Tenancy
and Agricultural Lands (Vidharbha Region and Kutch Area) Act, 1958;
Section 89. However due to financial incapability, the Company is
unable to establish industry and other company M/s Alumina Refinery
Pvt. Ltd. being ready to purchase the said land, upon careful
consideration the Government on the basis of treating the case as “A
special case and not to be treated as precedent” has granted the
permission.
2. Papers containing pages 1 to 89 are returned herewith.
Encl:
As above
Yours sincerely
Section Officer
Revenue Department
State of Gujarat
Copy to:
Select File/Z Branch
Select File/Z Branch/N.S.A”
30. Thereafter, the Deputy Collector has issued an order dated
15.1.2010 granting permission to sell the land for industrial purpose under
Section 89A of the Act. He, however, added that the action of issuing the
certificate can be taken only after the submission of a project report and
technical recommendation letter of Industries Commissioner by respondent
No.5. The above referred order dated 15.1.2010 of the Deputy Collector
granting permission to sale the land reads as follows:-
No. Jaman Vashi/218/09
Office of Deputy Collector
Bhuj, Date-15/01/2010
To
Shri Hanumantrav V. Kharat
Indi Gold Refineries Limited
201-212, EMCS House
289 SBSL, Fort
Mumbai-400 001
Subject:- Regarding getting the approval for sale of the agricultural
land of village Kukma and Moti Reldi, Taluka Bhuj purchased for
industrial purpose, under Section-89-A of the Tenancy Act.
Read:- Letter No. Ganat/2809/2126/Z dated 18/12/2009 of the Revenue
Department of the Government, Gandhinagar.
Sir,
With reference to the above subject it is to be informed that
vide this office certificate No. Land/Vasi/1169/03 dated 01/05/2003
you have been granted permission under Section-89-A of the Tenancy Act
for purchasing agricultural land for industrial purpose as under:-
In the above lands as the company due to financial circumstances
is not in a position to establish any industry, with reference to your
application dated 06/12/2008 seeking the permission for sale of the
above land for industrial purpose to Shri Alumina Refinery (Pvt.)
Limited, Mumbai for the Alumina Refinery project, vide the above
referred letter of the R.D. of the Government as a “special case and
with a condition not to treat as the precedent” the permission is
granted, which may be noted.
As the above land is admeasuring more than 25 Acres, in this
case on submission of the Project Report and the Technical
recommendation letter of Industries Commissioner, G.S., Gandhinagar by
the party desirous to purchase the land Alumina Refinery (Pvt.) Ltd.,
Mumbai, further action can be taken by this office for issuing the
certificate under Section-89 of the Tenancy Act, which may be noted.
Sd/-
Deputy Collector, Bhuj
Copy to
Alumina Refinery (Pvt.) Ltd.
1501-1502 Shiv Shankar Plaza-
Near HDFC Bank, Sector-8
Airoli, New Mumbai-400 708”
31. This led to the sale deed between respondent No.4 and 5 for
sale of the lands at Rs.1.20 crores. It is, however, interesting to note
that the sale deed is signed for Indigold by Nitin Patel on the basis of
the power of attorney from them, and for Alumina by his brother Nilesh
Patel. Subsequently the permission from the Industries Commissioner was
obtained on 8.3.2010, and the certificate under Section 89A (3) (c) (i) of
purchase for bona-fide industrial purpose on 21.5.2010.
The submissions on behalf of the appellants:-
32. The decision of the State Government to permit the transfer of
the concerned agricultural lands was challenged by the appellants on
various grounds. Firstly, it was submitted that Section 89 basically bars
transfer of agricultural land to the non-agriculturists. Section 89A makes
an exception only in favour of a bonafide industrial user. The industry is
required to be set-up within three years from the issuance of necessary
certificate issued by the Collector for that purpose, and the production of
the goods and services has to start within five years. If that is not
done, the Collector has to take over the land after holding an appropriate
enquiry under sub-section (5) of 89A, and the land has to vest in the
Government after paying the compensation to the purchaser which has to be
determined having regard to the price paid by the purchaser. In the
instant case, it is very clear that the respondent No. 4 had expressed
their inability to develop the industry way back on 6.12.2008. The
Collector was, therefore, expected to hold an enquiry and pass appropriate
order. This was a power coupled with a duty.
A judgment of this Court in
Indian Council for Enviro-Legal Action Vs. Union of India & Ors. reported
in 1996 (5) SCC 281, was relied upon to submit that a law is usually
enacted because the legislature feels that it is so necessary. When a law
is enacted containing some provisions which prohibit certain types of
activities, it is of utmost importance that such legal provision are
effectively enforced. In Section 89A there is no provision for a further
transfer by such a party which has not developed the industry, and
therefore, the Collector ought to have acted as required by Section 89A
(5). In that judgment it was observed “enacting of a law, but tolerating
its infringement, is worse than not enacting a law at all.” It was
submitted that in the instant case the state itself has issued an order in
violation of the law.
33. It was then submitted that the Collector was expected to
dispose of the land by holding an auction. The judgment of this court in
Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors.
reported in 2012 (3) SCC 1 was relied upon in support, wherein it has been
held that natural resources are national assets and the state acts as
trustee on behalf of its people. Public Interest requires that the
disposal of the natural resources must be by a fair, transparent and
equitable process such as an auction. The same having not been done, the
State exchequer has suffered. Reliance was also placed on the judgment in
Noida Entrepreneurs Association Vs. Noida and ors. reported in 2011 (6) SCC
508 to submit that whatever is provided by law to be done cannot be
defeated by an indirect and circuitous contrivance.
34. In the instant case, the transfer of the land has been
permitted because respondent No. 5 directly approached the Chief Minister
and thereafter the Revenue Minister. It was submitted that such an act of
making of a special case smacks of arbitrariness. The judgment of this
Court in Chandra Bansi Singh Vs. State of Bihar reported in 1984 (4) SCC
316 was relied upon in this behalf. In that matter the state of Bihar had
released a parcel of land acquired by it for the benefit of one particular
family which had alleged to have exercised great influence on the
Government of the time. The action of the State was held to be a clear act
of favouritism. Another judgment of this Court in Manohar Joshi Vs. State
of Maharashtra and Ors. reported in 2012 (3) SCC 619 was also relied upon
to criticise a direct approach to the ministers rather than going through
the statutory authorities. Reliance was also placed on the judgment in
Bhaurao Dagdu Paralkar Vs. State of Maharashtra reported in 2005 (7) SCC
605 which has explained the concept of ‘fraud’ from paragraph 9 to 12
thereof. In paragraph 12 amongst others it has referred to an earlier
judgment in Shrisht Dhawan Vs. Shaw Bros reported in 1992 (1) SCC 534 which
relies upon the English judgment in Khawaja Vs. Secy. of State for Home
Deptt. reported in 1983 (1) All ER 765. In para 20 of Shrisht Dhawan
(supra) this Court has observed:-
“ If a statute has been passed for some one particular
purpose, a court of law will not countenance any attempt which
may be made to extend the operation of the Act to something else
which is quite foreign to its object and beyond its scope.’
Present day concept of fraud on statute has veered round abuse
of power or mala fide exercise of power. It may arise due to
overstepping the limits of power or defeating the provision of
statute by adopting subterfuge or the power may be exercised for
extraneous or irrelevant considerations. The colour of fraud in
public law or administrative law, as it is developing, is
assuming different shades……”
35. The learned senior counsel for the appellants Mr. Huzefa Ahmadi
submitted that the appellants’ writ petition should not have been dismissed
only on the ground of delay, in as much as the environmental clearance to
the project was granted on 19.2.2012 and the writ petition was filed in
March 2012. He submitted that similarly the appellant cannot be criticised
for suppression of any information about the investment made by respondent
No. 5, since the appellant cannot be aware of the same. In any case he
submitted that in as much as there has been an immediate interim order, the
plea of large investment having been made is untenable. As far as the
objection to the appellant No 1 being a person belonging to a rival
political party is concerned, he submitted that he has specifically
accepted that he is a political activist. In any case, he submitted that
the Collector did not act in accordance with law at any point of time.
Similarly, the order passed by the Government is not a reasoned order and
is undoubtedly arbitrary. The power in the Collector implied a duty in him
to act in accordance with law. He relied upon a judgment of this Court in
Deewan Singh & Ors. Vs. Rajendra Pd. Ardevi & Ors. reported in 2007 (10)
SCC 528 in this behalf.
Submissions on behalf of the State Government:-
36 . The defence of the Government has principally been that because
Indigold was not in a position to set up the industry, and Alumina had
given a proposal in the Vibrant Gujarat summit to set up its project on the
very land, the proposal was accepted.
It had entered into an MOU with GMDC
which was to have 26% equity therein.
While looking into the proposal,
initially there was some hesitation on the part of the Government as can be
seen from the notings of the officers in the Government files. However,
ultimately looking into the totality of the factors, the Government took
the decision to permit the transfer of the land.
It is not mandatory that
the land must be resumed under Section 89A (5) of the Tenancy Act, if the
initial purchaser does not set up the industry.
Section 89A (5) does not
operate automatically. Besides, the permission to Indigold to sell the
land can be explained with reference to the authority of the Collector
available to him under the first proviso to Section 89(1) read with
condition No. (4) of the permission dated 1.5.2003 granted to Indigold to
purchase the concerned lands.
This condition No. (4) reads as follows:-
“4. These lands cannot be sold, mortgaged, gifted or
transferred in any manner etc. without obtaining prior
permission of the competent officer.”
Last but not the least, Section 126 of the Tenancy Act was relied upon to
submit that the State Government has an overall control which permits it to
issue the necessary directions. This Section 126 reads as follows:-
“126. Control- In all matters connected with this Act, the
State Government shall have the same authority and control over
the [Mamlatdar] and the Collectors acting under this Act as [it
has and exercises] over them in the general and revenue
administration.”
37. The learned senior counsel Mr. Andhyarujina appearing for the
State, submitted that the Collector had the authority to grant such a
permission to sell under Rule 45 (b) of the Bombay Tenancy and Agricultural
Lands Rules, 1959. This rule reads as follows:-
“45.Circumstances in which permission for sale, etc. of
land under section 89 may be granted - The Collector or any
other officer authorised under the proviso to sub-section (1) of
section 89 may grant permission for sale, gift exchange, lease
or mortgage of any land in favour of a person who is not an
agriculturists or who being an agriculturists, cultivates
personally land not less than three family holdings whether as
tenure holder or tenant or partly as tenure holder and partly as
tenant in any of the following circumstances:-
a) such a person bona fide requires the land for a non-
agricultural purpose; or
b) the land is required for the benefit of an industrial or
commercial undertaking or an educational or charitable
institution”
…..
Submissions on behalf of the other respondents:-
38. Since it was the respondent No.4 Indigold, which had initially
purchased the land for industrial purpose, the stand of Indigold was of
significance. It is, however, very relevant to note that Indigold had
neither filed any affidavit in the High Court, nor in this Court, and their
counsel Mr. Trivedi stated that he has no submissions to make. It is the
failure of the respondent No. 4 to set up the industry, and the subsequent
justification on the basis of financial difficulties for the same which has
led to the sale of the land. It is strange that such a party had nothing
to state before the Court. This is probably because it had already
received its price after selling the land. The respondent No. 4 appeared
to be very much disinterested in as much as even the sale documents were
signed on their behalf by Mr. Nitin Patel, the Managing Director of
Alumina. Mr. Ahmadi, learned counsel for the appellant therefore alleged
collusion amongst all concerned.
39. The respondent No. 5, however, contested the matter vigorously.
Mr. Krishnan Venugopal, learned senior counsel appearing for respondent
No. 5 pointed out that the respondent No. 5 had entered into a
correspondence with GMDC earlier, and thereafter participated in the
Vibrant Gujarat Summit. He pointed out that the respondent No. 5 had
previous experience in dealing in Alumina products, and therefore was
interested in setting up the plant in Kutch. It intended to use the
bauxite available in that district, and finally it was going to have a
production of 25,000 metric tonnes of Alumina per-annum. It was being set
up with an investment of Rs. 30 crores. The project was being set up in
furtherance of the Industrial Policy of the State of Gujarat and with the
technical know-how from NALCO. He drew our attention to the project report
and the photographs showing the work done so far.
40. It was submitted that the respondent No.5 had also entered into
an MOU with GMDC whereunder GMDC was to supply bauxite for 25 years, and it
was to have 26% equity participation. It is however, material to note that
there are 3 MOUs placed on record. The first MOU is dated 13.1.2009
between Alumina Refinery Pvt. Ltd. and GMDC which is basically like a
declaration of intent to set up the plant, and it contains the assurance of
support from the Government of Gujarat. The second MOU between them is
dated 9.9.2009, and it records that Government of Gujarat has agreed to
support this refinery, and that the GMDC had agreed to supply, on priority
basis, the plant-grade bauxite to this plant. It is this document which
states that GMDC will invest in the equity of Alumina Refinery to an extent
not exceeding 26%. It contains the promise to supply bauxite. Mr.
Krishnan Venugopal, fairly accepted that this document cannot be construed
as a contract, and that it can at best be utilised as a defence to insist
on a promissory estoppel. The third MOU is dated 30.11.2011 which is an
agreement between Earth Refinery Pvt. Ltd. which the holding company of
Respondent No. 5 and GMDC. In clause 2.1 of this agreement they have
agreed to set up a joint venture Company by name Alumina Refinery Ltd.
Clause 6.2 of this agreement states that equity participation of GMDC in
this company shall be 26%. The obligation of GMDC has been spelt out under
clause 4.2 to supply bauxite.
41. The principal submission of respondent No. 5 is that it is a
bonafide purchaser of land of respondent No. 4, it has a serious commitment
for industrial development, and it is acting in accordance with the
industrial policy of the State. There is nothing wrong if the Minister
directs the transfer of the unutilized land of respondent No. 4 to
respondent No. 5 for industrial purpose, and this should be accepted as
permissible. The minister’s action cannot be called malafide since it is in
the interest of the industrial development of the State. Mr. Krishnan
Venugopal submitted that the right to transfer is incidental to the right
of ownership, and relied upon paragraph 36 of the judgment of this Court in
DLF Qutab Enclave Complex Educational Charitable Trust Vs. State of Haryana
and Ors. reported in 2003 (5) SCC 622. He further submitted that unless
the possession of the unutilized area is taken over by the State, the
landlord’s title to it is not extinguished. There is no automatic vesting
of land in the instant case. He relied upon the judgment of this Court in
Ujjagar Singh Vs. Collector reported in 1996 (5) SCC 14 in this behalf.
42. It was then submitted that notings cannot be made a basis for
an inference of extraneous consideration, and reliance was placed upon the
observations of this Court in paragraph 35 in Jasbir Singh Chhabra Vs.
State of Punjab reported in 2010 (4) SCC 192. He pointed out that the law
laid down in Centre for Public Interest Litigation and Ors. Vs. Union of
India and Ors. (supra) had been clarified by a Constitution Bench in the
matter of Natural Resources Allocation, In Re: Special Reference (1) of
2012 reported in 2012(10) SCC 1. He referred to paragraph 122 of the
judgment which quotes the observations from Katuri Lal Lakshmi Reddy Vs.
State of J&K reported in 1980 (4) SCC 1 as follows:-
” 122. In Kasturi Lal Lakshmi Reddy v. State of J&K, while
comparing the efficacy of auction in promoting a domestic
industry, P.N. Bhagwati, J. observed: (SCC p. 20, para 22)
“22. … If the State were giving a tapping contract
simpliciter there can be no doubt that the State would have to
auction or invite tenders for securing the highest price,
subject, of course, to any other relevant overriding
considerations of public wealth or interest, but in a case like
this where the State is allocating resources such as water,
power, raw materials, etc. for the purpose of encouraging
setting up of industries within the State, we do not think the
State is bound to advertise and tell the people that it wants a
particular industry to be set up within the State and invite
those interested to come up with proposals for the purpose. The
State may choose to do so, if it thinks fit and in a given
situation, it may even turn out to be advantageous for the State
to do so, but if any private party comes before the State and
offers to set up an industry, the State would not be committing
breach of any constitutional or legal obligation if it
negotiates with such party and agrees to provide resources and
other facilities for the purpose of setting up the industry…..”
He also referred to paragraph 146 of the judgment (Per Khehar J), therein,
where the learned Judge has observed that the court cannot mandate one
method to be followed in all facts and circumstances, and auction and
economic choice of disposal of natural resources is not a constitutional
mandate. It was therefore submitted that, it was not necessary that the
Collector ought to have opted for auction of the concerned parcel of land.
43. The learned senior counsel Mr. Krishnan Venugopal, lastly drew
our attention to the Jantri prices of the land in 2008. He pointed out that
at the highest, the State would have sold this land, as per the Jantri
price, for Rs. 4.35 crores. Assuming that the State was also to pay Rs.
1.20 crores as compensation to Indigold, the loss to the State would come
to Rs 3.15 crores. He submitted that if it comes to that, the respondent
No. 5, alongwith Indigold, could be asked to compensate the state for this
difference of 3.15 crores or such other amount as may be directed, but its
project must not be made to suffer.
44. GMDC was represented by learned senior counsel Mr. Giri. He
defended the action of the State as something in furtherance of the
industrial policy of the State. If the land was to be sold and
compensation was to be given, it may not have resulted into much benefit to
the state. He relied upon Section 7 of the Transfer of Property Act, to
submit that every person competent to contract, and entitled to
transferable property can transfer such property, and under S 10 of the
said Act any condition restraining alienation was void. He relied on
paragraph 20 of the judgment in Prakash Amichand Shah Vs. State of Gujarat
reported in 1986 (1) SCC 581, to submit that divesting of title takes place
only statutorily, and which had not happened in the instant case.
Examination of the Scheme underlying Sections 89 and 89A above:-
45. Before we examine the submissions on behalf of all the parties,
it becomes necessary to examine the scheme underlying the relevant sections
89 and 89A. As can be seen, Section 89 essentially bars the transfers of
agricultural lands to non-agriculturists. The said section is split into
four parts.
(a) Sub-section (1) provides that no sale or mortgage, gift, exchange or
lease of any land, or no agreement in that behalf shall be valid in favour
of a non-agriculturist. The first proviso to Section 89 (1) makes an
exception viz. that the Collector or an officer authorised by the State
Government in this behalf may grant permission for such sale, gift,
exchange, lease or mortgage for that purpose, in such circumstances as may
be prescribed. The second proviso of course provides that no permission is
required where the land is being sold to a person who is not an
agriculturist, but it is sold for agricultural purpose.
(b) Sub section (2) provides that the above restriction will not apply to a
sale etc. in favour of an agricultural labourer or an artisan
(c) Sub-section (3) similarly provides that the above restriction will not
apply to a mortgage in favour of a cooperative society, to secure a loan
therefrom.
(d) Sub-section (4) lays down that the restriction under Section 90 with
respect to the reasonable price for the land to be sold will not apply to
the sale under Section 89(1).
46. Section 89A creates an exception to Section 89 for sale of land
for bona-fide industrial purposes in certain cases. This section is split
into five sub-sections. Sub-section (1) of Section 89A deals with those
lands for which no permission is required under sub-section (1) of Section
65B of the Bombay Land Revenue Code, 1879, i.e. lands such as those in
industrial zone etc. It lays down that nothing in Section 89 will prohibit
the sale or the agreement of sale of such zonal land in favour of any
person for use of such land by such person for a bona-fide industrial
purpose. Section 89A, creates an exception to Section 89 by allowing a sale
of land for bonafide industrial purpose in certain cases as contemplated
under the said section. These requirements are laid down in the provisos
(a) to (d) of sub-section (1) and in sub-section (2) to (4) of Section 89A.
They are as follows:-
(i) That the land is not situated within an urban agglomeration,
(ii) A prior permission of the Industries Commissioner of the State is to
be obtained where the area of the land proposed to be sold exceeds ten
hectares,
(iii) The land proposed to be sold shall not exceed four times the area on
which the construction of the industry is to be put up excluding the
additional land for pollution measures,
(iv) If the land belongs to a tribal, it shall be subjected to certain
additional restrictions,
(v) Within 30 days the purchaser has to inform the Collector of such
purchase failing which he is liable to a fine,
(vi) The Collector has thereafter to make an enquiry whether the land is
purchased for a bonafide industrial purpose and issue a certificate to that
effect. In case he is not satisfied of the bonafide industrial purpose, he
has to hear the purchaser, and thereafter he may refuse issuance of such
certificate against which an appeal lies to the State Government.
(vii) Lastly, the purchaser has to commence the industrial activity within
three years from the date of certificate, and start the production of goods
and services within five years from the date of issuance of certificate.
47. Where the purchaser fails to start the industrial activity as
stipulated above, Section 89A (5) requires the Collector to hold an
enquiry, wherein he has to give the purchaser an opportunity of being
heard. Thereafter, if he confirms such a view, he is expected to pass an
order that the land shall vest in the Government which will, however, be
done after determining appropriate compensation payable to the purchaser,
which has to be done having regard to the price paid by the purchaser. Then
the land shall be disposed of by the Government having regard to the use of
the land. Thus, the only authority contemplated under the section is the
Collector, and the decision is to be taken at his level. It is only in the
event of his refusing to give the certificate of purchase for bonafide
industrial purpose that an appeal lies to the State Government. Thus,
where one wants to purchase agricultural land for industrial purposes, one
has to first obtain the permission of the Industries Commissioner. The
purchaser has also to inform the Collector about the purchase within 30
days of such purchase, and obtain a certificate that the land is purchased
for a bonafide industrial purpose. He has to see to it that the industrial
activity starts in three years from the date of such certificate, and the
production of goods and services also starts within five years thereof,
which period can be extended by the State Government, in an appropriate
case. In the event the purchaser fails to commence such industrial
activity, the Collector has to make an enquiry, and thereafter pass an
appropriate order of resumption of the land on determining the
compensation. Thus, the entire authority in this behalf is with the
Collector and none other.
Have the provisions of Sections 89 and 89A been complied in the present
case:-
48. Now, we may examine the developments in the present matter on
the backdrop of these statutory provisions. It is relevant to note that in
their first letter dated 6.12.2008, the respondent No.4 has not referred to
any financial constraint. The letter merely states that respondent No.4
wanted to dispose off the entire piece of land since they were no more
interested in putting up any industrial project in the said land. As can
be seen from Section 89A, the object of the section is to permit transfer
of agricultural land, only for a bonafide industrial purpose. Where the
land exceeds ten hectares, such a purchaser has to obtain, to begin with, a
previous permission of the Industries Commissioner before any such sale can
be given effect to. Thereafter, the purchaser has to send a notice to the
Collector within 30 days of the purchase, and the Collector has to be
satisfied that the land has been validly purchased for a bonafide
industrial purpose, in conformity with the provisions of sub-section (1),
and then issue a certificate to that effect. There is a further
requirement that the purchaser has to commence the industrial activity
within three years, and has to start the production within five years from
the date of issuance of the certificate. Admittedly no such steps were
taken by Indigold, nor was any affidavit in reply filed by them, either
before the High Court or before this Court. Mr. Trivedi, learned counsel,
appeared for Indigold, and he was specifically asked as to what were the
attempts that had been made by respondent No.4 to set up the industry, and
what were the difficulties faced by it. He was asked as to whether there
was any material in support of the following statement made in Indigold’s
letter dated 16.6.2009 i.e. ‘we have tried our level best to set up the
industry on the land in question.’ Mr. Trivedi stated that he had nothing
to say in this behalf. All that he stated was that the respondent No.4
purchased the land, it was unable to set up its unit, and it sold the land
to respondent No.5.
49. What is, however, material to note in this behalf is that
whereas the land is supposed to have been purchased in 2003 at a price of
Rs.70 lakhs, it is said to have been sold at Rs.1.20 crores in 19.1.2010.
It is very clear that even before the letter of 16.6.2009 proposing to sell
the land to respondent No.5, in December 2008 itself respondent No.4 had
written to the Collector that they were no more interested in putting up
the industrial project, and therefore they wanted to dispose off the piece
of land to their prospective clients.
That being the position, it was
mandatory for the Collector at that stage itself to act under sub-Section 5
of Section 89A to issue notice, conduct the necessary enquiry, determine
the compensation and pass the order vesting the land in the State
Government.
It is very clear that Collector has done nothing of the kind.
In any case he should have taken the necessary steps in accordance with law
at least after receiving the letter dated 16.6.2009. Again he did not take
any such steps.
50. It has been pointed out by the respondents that the
representative of respondent No.5 participated in the Vibrant Gujarat
Global Investors Summit on 31.1.2009, and signed an MOU with respondent
No.6 for setting up a specialty alumina plant in Kutch. The MOU stated
that the Government of Gujarat was assuring all necessary permissions to
respondent No.5. The respondent No.5 will be investing an amount of Rs.30
crores in the proposed plant, and it will provide employment to 80 persons.
Thereafter, the above referred letter dated 12.6.2009 was addressed by the
respondent No.5 to the Deputy Collector Bhuj. The letter sought permission
to purchase land belonging to Indigold. It referred to the letter of
respondent No.4 dated 6.12.2008. It stated that the respondent No.5 would
like to purchase the land for a bonafide industrial purpose, for setting up
their upcoming project, Alumina Refinery Limited, on the land admeasuring
39 acres and 25 gunthas, situated in villages Kukma and Moti Reladi. It
then sought the permission from the competent authority, under Section 89
of the Tenancy Act, 1958 to register the sale in their favour.
51. After writing to the Collector on 16.6.2009, without waiting
for any communication from him, Alumina wrote to the Chief Minister on
18.6.2009. Directors of Alumina had a meeting with the Minister of Revenue
Smt. Anandiben Patel on 29.6.2009, which was recorded by Mr. Nitin Patel on
30.6.2009. The Chief Minister’s Secretary wrote to the Principal Secretary,
Revenue Department on 2.7.2009 seeking a note on the possible course of
action. The Revenue Department sought a factual report from the Collector,
who instead of furnishing the same, forwarded the proposal of Alumina
itself to the Department for granting the permission for the sale. The
Department looked into the statutory provisions, and then recorded on
7.8.2009 that the Collector is required to take an action at his level in
the matter, and the proposal be sent back to him. After looking into the
legal position, the Principal Secretary, Revenue Department and the Chief
Secretary of the State wrote that the land be taken back, and thereafter
the issue of allotment be examined separately.
52. The matter could have rested at that, but the Minister of
Revenue put a remark that permission be granted as a special case, since
the land is of private ownership. The matter was again discussed
thereafter, and then a suggestion was made by the departmental officers
that 50% of the unearned income may be sought from the seller. The Chief
Secretary noted that land may be given to the new party provided Industries
Department recommends it as per the laid down rules. He maintained that
the land be taken back, and then be re-allotted to the new party. The
Minister, however, again passed an order that as suggested earlier by her,
permission be given and, therefore, the Collector ultimately granted the
permission as directed by the Government. Thus, as can be seen, that
instead of the statutory authority viz. the Collector acting in accordance
with the statutory mandate, only because a direction was given by the
Minister that the statutory authority was bypassed, and even the enquiry as
contemplated under sub-section 5 of Section 89A was given a go-by. Thus,
as can be seen from the above narration what emerges from the record is
that whereas Sections 89 and 89A contemplate a certain procedure and
certain requirements, what has been done in the present matter is quite
different. We may refer to Lord Bingham’s work titled ‘Rule of Law’ where
in the Chapter on exercise of power, he observes that:
‘Ministers and public officers at all level must exercise the
powers conferred on them in good faith, fairly, for the purpose for
which the powers were conferred, without exceeding the limits of such
powers and not unreasonably’ .
He quotes from R v. Tower Hamlets London Borough Council [1988] AC 858,
which states:
‘Statutory power conferred for public purposes is
conferred as it were upon trust, not absolutely, that is to say, it
can validly be used only in the right and proper way which the
parliament, when conferring it, is presumed to have intended.’
53. It is well settled that where the statute provides for a thing
to be done in a particular manner, then it has to be done in that manner
and in no other manner. This proposition of law laid down in Taylor Vs.
Taylor (1875) 1 Ch D 426,431 was first adopted by the Judicial Committee
in Nazir Ahmed Vs. King Emperor reported in AIR 1936 PC 253 and then
followed by a bench of three Judges of this Court in Rao Shiv Bahadur
Singh Vs. State of Vindhya Pradesh reported in AIR 1954 SC 322. This
proposition was further explained in paragraph 8 of State of U.P. Vs.
Singhara Singh by a bench of three Judges reported in AIR 1964 SC 358 in
the following words:-
“8. The rule adopted in Taylor v. Taylor is well recognised
and is founded on sound principle. Its result is that if a
statute has conferred a power to do an act and has laid down the
method in which that power has to be exercised, it necessarily
prohibits the doing of the act in any other manner than that
which has been prescribed. The principle behind the rule is that
if this were not so, the statutory provision might as well not
have been enacted….”
This proposition has been later on reiterated in Chandra Kishore Jha Vs.
Mahavir Prasad reported in 1999 (8) SCC 266, Dhananjaya Reddy Vs. State of
Karnataka reported in 2001 (4) SCC 9 and Gujarat Urja Vikas Nigam Limited
vs. Essar Power Limited reported in 2008 (4) SCC 755.
54. (i) Therefore, when Indigold informed the Collector on 6.12.2008
that they were ‘no more interested’ to put up any industrial project, and
were disposing of the entire piece of land to their prospective client, the
Collector was expected to hold the necessary enquiry. This was the minimum
that he was expected to do. After holding the enquiry, if he was convinced
that the industrial activity had not been started, he was expected to pass
an order that the land will vest in the State which will have to be done
after determining the compensation payable having regard to the price paid
by the purchaser. In the instant case, the respondent No.4 claims to have
purchased the land for Rs.70 lakhs. As pointed out by Mr. Krishnan
Venugopal himself, as per the jantri price of the lands at that time, i.e.
even at the Government rate in 2008, the land was worth Rs.4.35 crores.
The collector was expected to dispose of the land by auction which is the
normal method for disposal of natural resources which are national assets.
Out of that amount, the compensation payable to the respondent no.4 would
have been around Rs.70 lakhs having regard to the amount that the
respondent No.4 had paid. This is because respondent no. 4 had purchased
agricultural land to put up an industry, and they had taken no steps
whatsoever for over five years to set up the industry. They were not
expected to purchase the land, and thereafter sell it for profiteering. The
Jantri price is an official price. In actual auction the State could have
realised a greater amount. In permitting the sale inter-se parties, the
State exchequer has positively suffered.
(ii) On the other hand, in the event, the Collector was to form an opinion
after receiving the bids or otherwise that it was not worth disposing of
the land in that particular way, he could have divested Respondent No. 4 of
the land by paying compensation, and re-allotted the same to the Respondent
No 5 at an appropriate consideration. The statute required him to act in a
particular manner and the land had to be dealt in that particular manner
only, and in no other manner, as can be seen from the legal position,
accepted in various judgments based on the proposition in Taylor vs.
Taylor.
55. Thus inspite of the Secretaries repeating their advice, the
Minister of Revenue Smt. Anandiben Patel has insisted on treating this case
as a special case for which she has recorded no justifiable reasons
whatsoever, and orders were issued accordingly. Under Section 89A(3), the
Government is the appellate authority where the Collector does not grant a
certificate for purchase of bonafide industrial purpose. Thus what has
happened, thereby is that the powers of the statutory authority have been
exercised by the Government which is an appellate authority.
56. The State Government gave three additional reasons when it
defended its decision. (i)The first reason was that if the land had been
directed to be vested in the State Government, State would have been
required to pay compensation to Indigold, and it would have been a long-
drawn process for determining the valuation of the land, and thereafter for
finding the suitable and interested party to set up an industry. As stated
earlier, this plea is not tenable. If the law requires something to be
done in a particular manner, it has got to be done in that way and by no
other different manner. (ii) The second reason given was that the action
was in State’s own interest because through its public sector undertaking
i.e. GMDC, it was involved in the transaction viz. that is it is going to
have 26% equity. As far as this part is concerned again it is difficult to
accept this reason also because one does not know what will be the value of
shares of the new company. (iii) Third reason given was that the land was
worth Rs.4.35 crores as per the Jantri in 2008, and as per the revised
Jantri in 2011 it had come down to Rs.2.08 crores. This is a situation
which was brought about by the State itself and this cannot be a ground for
the State to submit that it would not have gained much in the process.
57. That apart it has to be examined whether the Government had
given sufficient reasons for the order it passed, at the time of passing
such order. The Government must defend its action on the basis of the
order that it has passed, and it cannot improve its stand by filing
subsequent affidavits as laid down by this Court long back in Commissioner
of Police, Bombay vs. Gordhandas Bhanji reported in AIR 1952 SC 16 in the
following words:-
“Public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of explanations
subsequently given by the officer making the order of what he
meant, or of what was in his mind, or what he intended to do.
Public orders made by public authorities are meant to have
public effect and are intended to affect the actings and conduct
of those to whom they are addressed and must be construed
objectively with reference to the language used in the order
itself.”
This proposition has been quoted with approval in paragraph 8 by a
Constitution Bench in Mohinder Singh Gill vs. Chief Election Commissioner
reported in 1978 (1) SCC 405 wherein Krishna Iyer, J. has stated as
follows:-
“8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain grounds,
its validity must be judged by the reasons so mentioned and
cannot be supplemented by fresh reasons in the shape of
affidavit or otherwise. Otherwise, an order bad in the beginning
may, by the time it comes to court on account of a challenge,
get validated by additional grounds later brought out.”
In this context it must be noted that the Revenue Minister’s direction
merely states that it is a private land, and the Governments letter dated
18.12.2009 speaks of the financial incapability of Inidgold. Neither the
letter dated 18.12.2009 from the Government to the Collector, nor the order
passed by the Deputy Collector on 15.1.2010 mention anything about:
1. the mineral policy of the Government of Gujarat.
2. the time taking nature of the process of acquiring the land and re-
allotting it.
3. That the second sale was under the authority of the Collector
available to him under the first proviso to Section 89(1) read with
condition no. (4) of the permission dated 1.5.2003 granted to Indigold
to purchase the concerned lands.
In the absence of any of these factors being mentioned in the previous
orders, it is clear that they are being pressed into service as an after-
thought. The Government can not be allowed to improve its stand in such a
manner with the aid of affidavits.
58. As noted earlier, the State Government is an Appellate
Authority under sub-section 3 of Section 89A, and it could not have given a
direction to the Collector who was supposed to take the decision under his
own authority. We may profitably refer to a judgment of a Constitutional
Bench in State of Punjay vs. Hari Kishan reported in AIR 1966 SC 1081. In
that matter, the respondent desired to construct a cinema at Jhajhar. He
submitted an application and under the orders of the State Government all
applications were directed to be referred to the State Government.
Therefore, though his application was initially accepted, the SDO informed
him that the application was rejected. He appealed to the State Government
and the appeal was rejected which has led to the petition in the High
Court. The Punjab High Court framed the question as to whether the State
of Punjab was justified in assuming the jurisdiction which was conferred on
the licensing authority by the act. The Supreme Court held in paragraph 4
of the judgment, that the course adopted by the State of Punjab had
resulted in the conversion of the appellate authority into the licensing
authority. That was not permissible, and so it is in the present case. The
reliance by the State Government on the overall control of the State under
Section 126 of the Tenancy Act cannot be used when in the instant case the
power is with the Collector and the appellate power is with the State
Government. The power under Section 126 can be utilized for giving general
guidelines, but not for interference or giving directions in individual
cases.
59. The submission that condition No.4 of the permission to
purchase, obtained by respondent No.4 in 2003 permits the Collector to pass
such an order is equally untenable. There is nothing in the statutory
scheme to suggest that a second sale, inter se parties, after the failure
of a purchaser to set up an industry is permissible. In such an event, the
statute requires an enquiry to be conducted by the collector. If he is
satisfied that there is a failure to set up the industry, the compensation
to be paid to the purchaser is determined. After this stage the land vests
in the Government. It is thus clear that the condition No 4 in the
permission obtained by Respondent No. 4 is bad in law, not having its basis
in any statutory provision. Even assuming that the Collector had that
power to lay down such a condition, the authority to permit the sale as per
the said condition had to be exercised by him in the manner contemplated
under Section 89 A (5) viz. after holding the enquiry as prescribed. Here
the enquiry itself was dispensed with. Rule 45(b) of the Bombay Tenancy and
Agricultural Lands Rules, 1959 also cannot be pressed into service for the
reason that, neither under Section 89 nor under Section 89A, a sale inter-
se parties is contemplated or permitted.
60. Now, what is to be noted is that wherever an agriculturist is
in possession of a land, either as an owner or as a tenant protected by the
statute, transfer of his land for industrial purposes is subject to the
conditions regulated by the Act. It is for the protection and preservation
of the agricultural land that the bar against conversion is created under
Section 89. Thereafter, as an exception, only a bonafide use for industrial
purpose is permissible under section 89A. Ownership of respondent No.4 was
subject to the conditions of utilization for bonafide industrial purpose,
and it was clear on record that respondent No.4 had failed to utilize the
land for bonafide industrial purpose. The reliance on Sections 7 and 10 of
the Transfer of Property Act is also misconceived in the present case,
since the Tenancy Act is a welfare enactment, enacted for the protection of
the agriculturists. It is a special statute and the sale of agricultural
land permitted under this statue will have to be held as governed by the
conditions prescribed under the statute itself. The special provisions made
in the Tenancy Act will therefore prevail over those in the Transfer of
Property Act to that extent.
61. Besides, the present case is clearly a case of dictation by the
State Government to the Collector. As observed by Wade and Forsyth in Tenth
Edition of Administrative Law:-
“if the minister’s intervention is in fact the effective
cause, and if the power to act belongs to a body which ought to
act independently, the action taken is invalid on the ground of
external dictation as well as on the obvious grounds of bad
faith or abuse of power”.
The observations by the learned authors to the same effect in the Seventh
Edition were relied upon by a bench of three judges of this Court in
Anirudhsinhji Karansinhji Jadega and anr. vs. State of Gujarat reported in
1995 (5) SCC 302. In this matter the appellant was produced before the
Executive Magistrate, Gondal, on the allegation that certain weapons were
recovered from him. The provisions of TADA had been invoked. The
appellant’s application for bail was rejected. A specific point was taken
that the DSP had not given prior approval and the invocation of TADA was
non-est. The DSP, instead of granting prior approval, made a report to the
Additional Chief Secretary, and asked for permission to proceed under TADA.
The Court in para 13, 14, 15 has held this to be a clear case of
‘dictation’, and has referred to Wade and Forsyth on ‘Surrender Abdications
and Dictation’.
62. The respondent No.5 had the courage to state that the notings
of the Secretaries were inconsequential. As a beneficiary of the largesse
of the Government, respondent No.5 could say that, but it is not possible
for us to accept the same. In Trilochan Dev Sharma vs. State of Punjab
reported in AIR 2001 SC 2524 what is observed by this Court is relevant for
our purpose
“In the system of Indian Democratic Governance, as
contemplated by the constitution, senior officials occupying key
positions such as Secretaries are not supposed to mortgage their
own discretion, volition and decision making authority and be
prepared to give way or being pushed back or pressed ahead at
the behest of politications, for carrying out commands having no
sanctity in law.”
A higher civil servant normally has had a varied experience and the
ministers ought not to treat his opinion with scant respect. If Ministers
want to take a different view, there must be compelling reasons, and the
same must be reflected on the record. In the present case, the Secretaries
had given advice in accordance with the statute and yet the Minister has
given a direction to act contrary thereto and permitted the sale which is
clearly in breach of the statute.
63. Now, the effect of all that is stated above is that the land
which was purchased by respondent No.4 for Rs.70 lakhs is permitted by the
Government of Gujarat to be sold directly to respondent No.5 at Rs.1.20
crores to set up an industry which could not have been done legally. It is
undoubtedly not a case of loss of hundreds of crores as claimed by the
appellants, but certainly a positive case of a loss of a few crores by the
public exchequer by not going for public auction of the concerned property.
It is true as pointed out by Mr. Venugopal, learned senior counsel that in
a given case the state may invite an entrepreneur and give an offer.
However, in the instant case, the sale of the land for industrial purpose
is controlled by the statutory provisions, and the State was bound to act
as per the requirements of the statute. The minister’s direction as seen
from the record clearly indicates an arbitrary exercise of power. The
orders passed by the Government cannot therefore be sustained. As seen
earlier, there is neither a power nor a justification to make any special
case, in favour of the Respondent No 5. Such exceptions may open floodgates
for similar applications and orders, even though the Gujarat Government is
contending that this order is purportedly not to be treated as a precedent.
64. In our view, considering the scheme of the act, the process of
industrialization must take place in accordance therewith. As stated
earlier if the law requires a particular thing should be done in a
particular manner it must be done in that way and none other. The State
cannot ignore the policy intent and the procedure contemplated by the
statute. In the instant case, the State could have acquired the land, and
then either by auction or by considering the merit of the proposal of
respondent No.5 allotted it to respondent No.5. Assuming that the
application of the Respondent No 5 was for a bona-fide purpose, the same
had to be examined by the industrial commissioner, to begin with, and
thereafter it should have gone to the collector. After the property vests
in the Government, even if there were other bidders to the property, the
collector could have considered the merits and the bona-fides of the
application of Respondent No. 5, and nothing would have prevented him from
following the course which is permissible under the law. It is not merely
the end but the means which are of equal importance, particularly if they
are enshrined in the legislative scheme. The minimum that was required was
an enquiry at the level of the Collector who is the statutory authority.
Dictating him to act in a particular manner on the assumption by the
Minister that it is in the interest of the industrial development would
lead to a breach of the mandate of the statute framed by the legislature.
The Ministers are not expected to act in this manner and therefore, this
particular route through the corridors of the Ministry, contrary to the
statute, cannot be approved. The present case is clearly one of dereliction
of his duties by the Collector and dictation by the Minister, showing
nothing but arrogance of power.
65. The High Court has erred in overlooking the legal position. It
was expected to look into all the earlier mentioned aspects. The impugned
judgment does not reflect on the issues raised in the petition. It could
not be said that the petition was delayed and merely because investment had
been made by the respondent No.5, the court would decline to look into the
important issues raised in the PIL.
Epilogue:-
66. Before we conclude, we may observe that India is essentially a
land of villages. Although, urbanization and industrialization is taking
place, the industry has not developed sufficiently, and large part of our
population is still required to depend on agriculture for sustenance. Lands
are, therefore, required to be retained for agricultural purposes. They are
also required to be protected from the damage of industrial pollution.
Bonafide industrial activity may mean good income to the entrepreneurs, but
it should also result into good employment and revenue to the State,
causing least pollution and damage to the environment and adjoining
agriculturists. While granting the permission under Section 89A (5) the
Collector has to examine all these aspects. This is because the only other
exception for conversion of agricultural lands to non-agricultural purpose
is for those lands which are in an industrial zone. As far as the
conversion of lands otherwise than those in the industrial zone is
concerned, all the aforesaid precautions are required to be taken when a
decision is to be arrived at as to whether the application is for a
bonafide industrial purpose. In the instant case, there were newspaper
reports of apprehensions and protest of the adjoining farmers. The Revenue
Secretary and the Chief Secretary had placed the statutory provisions on
record. It was expected of the Government and the Revenue Minister to take
cognizance of these apprehensions of the farmers as well as the statutory
provisions brought to her notice by the secretaries. She has simply
brushed aside the objections of the secretaries merely because the Chief
Minister’s secretary had written a letter, and because she was the minister
concerned. While over-ruling the opinion of secretaries to the concerned
department, the Minister was expected to give some reasons in support of
the view she was taking. No such reason has come on record in her file
notings. She has ignored that howsoever high you may be, the law is above
you.
67. Development should not be measured merely in terms of growth of
gross domestic product, but it should be in terms of utility to the
community and the society in general. There is a certain inbuilt wisdom in
the statute which is the mandate of the legislature which represents the
people. The Minister has clearly failed to pay respect to the same.
Hence, the following decision:-
68. Having noted the legal position and the factual scenario, the
impugned judgment and order passed by the High Court will have to be set
aside. The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in law
for being in violation of the scheme and the provisions of Sections 89 and
89A of the Tenancy Act. The direct sale of land by Indigold to Alumina is
also held to be bad in law, and inoperative.
69. (i) In normal circumstances, the order hereafter would have been
to direct the Collector to proceed in accordance with Section 89A(5) viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the industrial activity and the production of goods and
services within the period specified. In the instant case, there is no
need of any such direction to hold an enquiry, in view of the letter of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii) Consequently, there will be an order that the land shall vest in the
State Government free from all encumbrances. This vesting order, however,
has to be on payment of appropriate compensation to the purchaser as the
Collector may determine. In the instant case, there is no need of having
this determination, for the reason that Indigold has received from Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in 2003. Neither Indigold nor
Alumina is making any grievance towards this figure or the payment thereof.
In fact, it is the case of both of them that the direct sale by Indigold
to Alumina for this amount as permitted by the State Government be held
valid. That being so, this amount of Rs. 1.20 crores would be set-off
towards the compensation which would be payable by the State Government to
the purchaser Indigold, since the land was originally purchased by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed off
by the State Government, having regard to the use of the land. The land
was supposed to be used for the industrial activity on the basis of the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed a
plant based on use of bauxite. The disposal of the land will, however, have
to be at least as per the minimum price that would be receivable at the
Government rate. In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5 has also offered to pay, without prejudice, the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores to
the State, the land will be permitted to be disposed of by the State
Government to Alumina provided Alumina pays this amount of Rs. 3.15 crores
to the State Government. This particular order is being made having
further noted that, Alumina has acted on the basis of the commitment made
to it by the Government of Gujarat in the Vibrant Gujarat Summit, and in
furtherance of the industrial development policy of the State. It is also
relevant to note that the respondent No.5 had made an application to the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four years. Mr. Ahmadi,
learned senior counsel appearing for the appellants has also submitted
that, as such, appellants are not against the development of Kutch area,
but they do want the state to follow the law and exchequer not to suffer.
In the circumstances, although we do not approve the action of the State
Government, and hold it to be clearly arbitrary and untenable, we are of
the view that the aforesaid order will be appropriate to do complete
justice in the matter.
70. In the circumstances, we pass the following orders:-
(a) The appeal is allowed in part;
(b) The impugned judgment and order passed by the High Court is set-
aside;
(c) The PIL No.44 of 2012 filed by the appellants is allowed by holding
that the order dated 18.12.2009 passed by the Government of Gujarat and by
the Collector of Kutch on 15.1.2010, are held to be arbitrary and bad in
law;
(d) In the facts and circumstances of this case, the sale of the
concerned land by Indigold to Alumina is held to be bad in law. The land
involved in the present case is held to have vested in the State of Gujarat
free from all encumbrances, and the amount of Rs. 1.20 crores paid by
Alumina to Indigold is treated as full payment towards the compensation
payable by the State to Indigold.
(e) If Alumina is interested in their proposed project, it shall pay an
amount of Rs. 3.15 crores to the Government of Gujarat within three months
hereafter. On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government. The further activities
of Alumina on the concerned parcel of land will start only after this
payment is made, and in the event the amount is not so paid within three
months hereafter, the Government will proceed to take further steps to
dispose of the land having regard to the use of the land.
(f) In the facts of the present case, there shall be no order as to
costs.
…………………………………..J.
[ H.L. Gokhale ]
……………………………………J.
[ J. Chelameswar ]
New Delhi
Dated: January 23, 2014
-----------------------
|Sr.No. |Name of Village |Survey No. |Acre/Guntha |
|1 |Kukma |94/1 |4.14 |
|2 |Kukma |94/2 |2.16 |
|3 |Moti Reldi |101/1 |9.30 |
|4 |Moti Reldi |106 |6.10 |
|5 |Moti Reldi |100/1 |2.20 |
|6 |Moti Reldi |107 |4.15 |
|7 |Moti Reldi |105/4 |5.21 |
|8 |Moti Reldi |110/2/3 |4.19 |
| | |Total |39.25 |
-----------------------
74
