(T.S. Thakur, C.J.I. and A.K. Sikri and R. Banumathi, JJ.)
Government of Tamil Nadu & Ors. Etc. ________________ Appellant(s)
v.
Gail India Limited & Ors. Etc. ______________________ Respondent(s)
Civil Appeal No(s). 759-761 of 2016, decided on February 2, 2016
[Arising out of S.L.P. (C) No(s).37224-37226 of 2013]
With
Civil Appeal No(s). 762 of 2016, [Arising out of SLP(C) No. 37694 of 2013], Civil Appeal No(s). 763 of 2016 [Arising out of SLP(C) No. 452 of 2014], and T.P.(C) No. 228/2014
The Order of the court was delivered by
Order
1. Leave granted in the special leave petitions
2. These appeals arise out of a common order dated 25th November, 2013 passed by the High Court of Madras whereby W.Ps. No. 12897, 15102 and 9542 of 2013 have been allowed and a communication dated 2nd April, 2013 issued by the Government of Tamil Nadu directing the respondent-Gas Authority of India Ltd. (GAIL) to lay gas pipeline along the National Highways without affecting the agricultural lands in the State of Tamil Nadu quashed.
3. A prestigious gas pipeline project of Gas Authority of India Ltd. (GAIL) between Kochi-Kootanad-Mangalore-Bangalore has been planned for execution by the Gas Authority of India Ltd. (GAIL). The laying/construction of the proposed pipeline involves acquisition of right of user in land required for the project under the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (Act 50 of 1962) hereinafter referred to as “the Right to User Act” and the Petroleum and Natural Gas Regulatory Board Act, 2006. It is not in dispute that the acquisition of right of user in land was undertaken and duly notified in terms of the provisions of the Act aforementioned. Several notifications dated 20th April, 2012, 25th May, 2012, 7th March, 2012, 4th January, 2012, 27 December, 2011 and 19th December, 2011 covering seven different districts in the State of Tamil Nadu, namely, Coimbatore, Tiruppur, Erode, Salem, Dharmapuri, Namakkal and Krishnagiri have been issued under Section 6(1) of the said Act. In terms of Section 6(2) upon publication of the declarations, mentioned above, the right of user in the lands specified in the said notifications stands vested absolutely in the Central Government free from all encumbrances. It is not in dispute that the declarations aforementioned have been assailed in a batch of writ petitions filed by seven owners whose lands are affected which petitions are pending adjudication before the High Court of judicature at Madras. Apart from the said petitions, there was no other challenge to the declarations by any other farmer or association whatsoever. This implies that the declarations under Section 6 and the vesting of the right of user in terms of Section 6(2) has attained finality except to the extent the same is challenged at the instance of the seven owners, referred to above.
4. With the vesting of the Right to User in the Central Government, GAIL the beneficiary of the acquisition appears to have started its operations which met with some resistance from the farming community. GAIL appears to have approached the State Government for police protection and assistance in implementing its project, but since the Government was reluctant to give any such protection, it was left with no option but to file Writ Petition No. 17216 of 2012 seeking a writ of mandamus directing the State Government to provide the required protection to its officials, contractors and agents for laying the its pipeline. That petition was dismissed by a Single Judge of the High Court of Madras by an order dated 26th July, 2012. Aggrieved, GAIL preferred Writ Appeal No. 1666 of 2012 which was heard and disposed of by a Division Bench of that High Court by an order dated 4th October, 2012 directing the Government of Tamil Nadu and its officials to convene a meeting of all stakeholders along with GAIL to find a workable solution in the matter. The State Government appears to have accordingly undertaken some kind of exercise in which it claims to have heard the agitating farmers and all other stakeholders. Based on the deliberation so held the State Government issued a communication dated 2nd April, 2013 by which it directed GAIL to take the following actions:
(1) GAIL should take steps for laying pipeline alongside the National Highways without affecting the agricultural lands of farmers of Tamil Nadu.
(2) GAIL may take steps laying pipeline along side of the National Highways and take necessary steps for supplying LNG to Tamil Nadu.
(3) GAIL shall immediately give up the present project of laying gas pipeline through agricultural lands.
(4) GAIL should immediately close all the existing trenches excavated for laying pipeline and GAIL should handover the lands in its original condition to the farmers/landowners.
(5) GAIL should immediately remove the pipes already laid, so as to enable the farmers to continue their agricultural activities.
(6) Farmers who have lost their fruit bearing trees or other structures but not yet compensated by GAIL so far, should be immediately compensated by GAIL.
5. Aggrieved by the above communication and the direction contained in the same, GAIL preferred Writ Petition No. 12897 of 2013 to challenge the same while Writ Petitions No. 15102 of 2013 and 9542 of 2013 were filed by two other individuals claiming to be public activists interested in the implementation of the gas pipeline project. All these petitions have been allowed by a Division Bench of the High Court of Madras by its order dated 25th November, 2013 impugned in the present appeals. The High Court has while quashing communication dated 2nd April, 2013 held that (1) the project in-question is a project of national importance which is going to benefit not only the State of Kerala and Karnataka but the State of Tamil Nadu as well. (2) the project in-question has been at all material points of time supported by the Government of Tamil Nadu (3) The right of owner of the land required for laying of the gas pipeline has been validly acquired under the provisions of Right to User Act, mentioned above, in terms of declaration issued from time to time. (4) The Government of Tamil Nadu was not justified in directing to GAIL to alter the alignment along the national highway especially when an Expert Committee constituted for the purpose had ruled against laying the gas pipeline along the highway on technical grounds.
6. The High Court has on the above basis quashed the order issued by the State Government for change of the alignment of the gas pipeline in the process paving way for GAIL to proceed with the project on the alignment settled by it using the lands already acquired in terms of the declarations, mentioned above. The High Court has issued a further direction to the State Government to facilitate implementation of the project in-question. The present appeals, as noticed earlier, assail the correctness of that direction.
7. We have heard at considerable length learned counsel for the parties who have taken us through the orders passed by the High Court from time to time including the related documents. There is, in our opinion, no manner of doubt that the State Government has no jurisdiction under the provisions of the Right to User Act or the petroleum and Natural Gas Regulatory Board Act, 2006 to issue any direction to GAIL to alter the alignment of the gas pipeline, nor have learned counsel for the appellants been in a position to indicate the source of power which the State Government could invoke for issuing such a direction. That apart, the right to user having been validly acquired in terms of the declaration published under Section 6 of the Right to User Act, there was no question of nullifying or negating such vesting or user by the Central Government or GAIL, the beneficiary of the acquisition. Inasmuch as the High Court found fault with the order issued by the State Government and accordingly quashed the same, it committed no error to warrant our interference.
8. Learned counsel for the appellants including interveners, however, contended that the process of determination of compensation payable to the land owners has neither been satisfactory nor expeditious. In most of the cases the compensation is yet to be determined argued learned counsel. It was further submitted that keeping in view the fact that there is a statutory limit of 10% of the market value in the matter of compensation payable to the land owners, the latter are likely to suffer great prejudice in case the authorities do not take a fair and reasonable view as to such value. They contended that this Court could intervene to reduce the hardship of the land owners, implicit in the acquisition of their land or the right of use thereof.
9. Mr. Dhruv Mehta, learned senior counsel appearing for the respondent-GAIL, however drew our attention to a communication dated 22nd August, 2012, from the Government to the District Collectors of Coimbatore, Erode, Tiruppur, Namakkal, Salem, Krishnagiri and Dharmapuri Districts in the State of Tamil Nadu directing that the High Power Committee constituted in terms of order dated 21st February, 2012 had approved the Right of User (ROU) compensation formula calculated at 10% of the reserve price of the land i.e. 10% of revised guideline value plus 30% compensation as payable to the land owners. Mr. Mehta submitted that although there was no provision under the Act for payment of 30% solatium, Gail has in principle accepted and agreed that the amount of compensation payable to the land owners could be 10% of the reserve price of the land plus an additional 30% of such compensation to be treated as the amount, payable to the land owners. He submitted that on the question of compensation payable to the land owners, GAIL had no reservation and was agreeable to making any payment that would truly represent the market value of the land and was prepared to make any payment based on the market value of the land as determined by the competent authority. Such determination could in turn be on the basis of guidelines/circle rates which the Government may prescribe for the purpose. He submitted that since the question of determination of compensation has remained undecided for a few years, GAIL has no objection to such market value being determined by reference to 1st January, 2016 so that the farmers do not suffer any prejudice. He urged that payment of compensation to the land owners on the basis of revised market value which the State Government may stipulate as on 1st January, 2016 plus 30% of such compensation payable by reference to 10% of the market value, will take care of the interest of the farmers even in matter of payment of compensation. At any rate any farmer not satisfied with the amount of compensation would have the liberty of approaching the civil court for redress by way of a proper determination of any higher amount payable to him.
10. The scheme of the Right to User Act envisages payment of compensation at the rate of 10% of the market value of the land. The determination of market value is left to the competent authority. The submissions made at the Bar before us suggest as though the process of determination of the market value has not been completed in regard to most of the land being used for the pipeline. If that be so, the process of determination can be initiated and guided by the Government stipulating a circle rate/guideline value/minimum price which will be treated by the competent authority as the market value for purposes of determining the amount of compensation payable to the owners. Mr. Mehta’s submission that the market value could be determined as on 1st January, 2016 in order to avoid any prejudice to the land owners is a fair offer which we are inclined to accept, with a view to reducing any hardship to the farmers. We would therefore permit the State Government to stipulate the circle rates/guideline value/market value for purpose of determination of compensation payable towards acquisition of Right to User of the affected land owners as on 1st January, 2016. The circle rate/guideline/notification so issued shall then become the basis for the determination of the compensation payable to the land owners at the hands of the competent authority. Once that amount is calculated and determined by the competent authority, the land owners shall be entitled to an additional 30% of the amount so determined towards compensation. The procedure so adopted would, in our opinion, reduce any hardship to the land owners and bring about a certain amount of uniformity in the matter of determination and payment of compensation to the affected parties. There is no gainsaying that anyone who is not satisfied with the amount so determined and paid, shall be free to seek a reference to the District Court for determination of the true market value of the land in which the right to user has been acquired by the Government by getting a reference made under Section 10(2) of the Right to User Act. We make it clear that our direction regarding payment of 30% over and above the amount otherwise payable to the land owners is on the basis of the concession made before us by GAIL and shall not be deemed to be a part of the scheme under the Act.
11. Ms. V. Mohana, learned senior counsel appearing for the interveners, seeks leave to withdraw the applications for intervention reserving liberty for the applicants to seek redress in appropriate proceedings before the appropriate court. Applications for intervention are accordingly dismissed as withdrawn with the liberty prayed for.
12. With the above observations, these appeals are disposed off leaving the parties to bear their own costs.
Transfer Petition (C) NO. 228 of 2014
13. We see no reason to direct transfer of W.P. No. 23553 of 2012 pending before the High Court of Madras to this Court.
14. The transfer petition is accordingly dismissed.
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