Madras High Court
Dalmia Cements (Bharat) Limited vs State Of Tamil Nadu Rep. By Secretary To ... on 16 October, 2006
Author: D. Murugesan
Bench: D. Murugesan, V. Ramasubramanian
JUDGMENT D. Murugesan, J.
Page 2821
1. The appellants, who are engaged in the business of manufacturing and marketing cement, and whose lands were sought to be acquired by the Government of Tamilnadu to enable Tamilnadu Cements Limited (in short known as TANCEM) to conduct operations for mining limestones, lost their challenge to the land acquisition proceedings and hence, are before us in the present appeals.
2. The brief facts leading to the above appeals are as follows:
(a) The Tamilnadu Industrial Development Corporation Ltd. a statutory corporation, wholly owned by the Government of Tamilnadu, obtained an industrial license to set up a cement factory in Ariyalur Taluk, of erstwhile Trichy District, in the year 1975. The State Geological branch conducted detailed prospecting operations in the area and submitted a report, based upon which, the Tamilnadu Industrial Development Corporation Ltd. requested the sanction of the Government for the acquisition of patta lands of an extent of Acres 1868.96 and poromboke lands of an extent of 444.07 acres, in the area, for the purpose of carrying out mining operations, setting up a factory, providing a Railway siding etc. By an order in G.O.Ms. No. 679, Industries Department, dated 26-5-1977, the Government accepted the request of Tamilnadu Industrial Development Corporation Ltd. for the acquisition of the said lands.
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(b) The said Government order also identified both the private patta lands as well as Government poromboke lands, required for mining operations, in the villages of Perianagalur, Aminabad, Kallankurichi, Kairalbad, Ariyalur and Valajanagar, in Ariyalur Taluk.
(c) In the meantime, a company known as TAMILNADU CEMENTS CORPORATION LIMITED, (hereinafter referred to as TANCEM) was incorporated under the Companies Act, 1956, both for the purpose of taking over the cement factory of Tamilnadu Industrial Development Corporation Ltd. at Alangulam, Ramand District and for the purpose of production, manufacture, process and sale of cement, Portland cement, alumina cement, lime and limestone, clinker and other bye products.
(d) Thereafter, the Government of Tamilnadu issued a notification in G.O.Ms. No. 921, Industries (M2) Department, dated 25-8-1986, reserving an extent of 1283.62 acres of lands in Kairulabad, Perianagalur, Valajanagaram, Ameenabad, Pudupalayam and Reddypalayam villages in Ariyalur Taluk, for exploitation of limestones by TANCEM. The notification was issued by order of and in the name of the Governor under Rule 58 of the Mineral Concession Rules,1960.
(e) After such reservation of the lands M/s. Dalmiya Cements (Bharat) Ltd. applied to the Government in Revenue Department, in the year 1990, for the grant of permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, to acquire and hold lands in excess of the ceiling limit in Velur-Valajanagar and Anandavadi villages of Ariyalur Taluk. By an order in G.O.Ms. No. 1255, Revenue Department dated 19.9.1991, the Government accorded permission to M/s. Dalmiya Cements to acquire and hold an extent of 620.51 acres in Valajanagaram village and 238.50 acres in Anandavadi village (totaling to 859.01 ordinary acres = 286.337 standard acres), for mining lime stone for the manufacture of cement within a period of two years subject to the other conditions stipulated in the said order.
(f) At about the same time, TANCEM also requested the State Government to acquire 252.36 acres of patta land in Valajanagar village, from out of the lands already reserved. The Government issued the first notification in G.O.(2D) No. 255, Industries (MIA.I) Department, dated 21.9.1993, under Section 4(1) of the Land Acquisition Act, 1894, in respect of certain lands in Valajanagaram village and the said notification was published in the Tamil Nadu Government Gazette No. 40-A dated 13.10.1993 in Part II Section 2 (Supplement). The said notification was followed by several subsequent notifications in respect of the other lands in Valajanagaram village and in other villages.
(g) In the meantime, M/s. Dalmiya Cements (Bharat) Ltd. applied for the grant of mining lease for limestone in the lands in Valajanagaram village to the State Government. However, the said application was rejected by the Government in G.O.Ms. No. 49, Industries (MMAII) Department, dated 10.2.1994. Some of the reasons cited by the Government for rejecting the mining lease application of M/s. Dalmiya Cements (Bharat) Ltd. are as follows:
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(i) that the lands in respect of which the mining lease application was made, had already been reserved for State exploitation through TANCEM;
(ii) that TANCEM had already filed an application questioning the grant of exemption to M/s. Dalmiya Cements (Bharat) Ltd. under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961;
(iii) that the area remaining after exclusion of the land reserved for State exploitation, does not form part of a compact and contiguous block, dis-entitling the applicant for the grant of a mining lease in view of the provisions of Section 6(1)(c) of the Mines and Minerals (Regulation and Development) Act, 1957;
(iv) that the exemption granted under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, in favour of M/s. Dalmiya Cements (Bharat) Ltd. had also expired and that the said exemption does not confer any right for the issue of prospecting license and mining lease on them.
(h) Thereafter the Government issued another order in G.O.Ms. No. 179, Industries (MIA.I) Department, dated 6.7.1994, according administrative sanction for acquisition of some more lands in the aforesaid villages in Ariyalur Taluk for the purpose of exploitation by TANCEM.
(i) In the meantime, following the Section 4(1) notification dated 21.9.1993, at least 14 notifications were issued during the period from October 1993 to July 1994 under Section 4(1) of the Act and several notifications were issued from December 1995 to March 1996, covering the lands owned by M/s. Madras Cements Ltd. M/s. Nilgiris Cements Ltd. M/s. Grasim Industries Ltd. M/s. Alagappa Cements Ltd. M/s. K.G.M. Minerals Pvt. Ltd. and some private individuals.
(j) M/s. Dalmiya Cements (Bharat) Ltd. filed two writ petitions in W.P. Nos. 7926 of 1994 and 7927 of 1994 challenging G.O.Ms. No. 49, Industries dated 10.2.1994 and G.O.Ms. No. 921, Industries dated 25.8.1986 respectively. While G.O.Ms. No. 49 dated 10.2.1994 related to the rejection of their mining lease application, G.O.Ms. No. 921 dated 25.8.1986 related to the reservation of lands by the Government for State exploitation through TANCEM. Both these writ petitions are stated to have been pending as on date and M/s. Dalmiya Cements (Bharat) Ltd. is in enjoyment of a stay order.
(k) In so far as the lands of M/s. Dalmiya Cements (Bharat) Ltd. sought to be acquired through various notifications are concerned, part of them were owned by M/s. Dalmiya Cements (Bharat) Ltd. in its own name and the other parts owned in the names of its subsidiary companies known as M/s. Anoopama Investment Limited, M/s. Poonam Finance Limited and M/s. Kanika Investments Limited. All these companies submitted their objections to the notification and participated in the enquiry conducted under Section 5A of the Act. The objections were however overruled and the Government issued necessary declarations under Section 6 of the Act on various dates from November 1994 to March 1997.
Page 2824 (1) In the meantime, M/s. Dalmiya Cements (Bharat) Ltd. applied for the grant of permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 to acquire and hold lands of an extent of 902.44 ordinary acres in Velur Valajanagar and Anandavadi villages in addition to the permission granted to them earlier. As a matter of fact, the original permission granted to them under G.O.Ms. No. 1255, Revenue dated 19.9.1991 for a period of two years had expired by then and their request for extension of time was rejected by the Government by an order dated 24.11.1994 on the ground that the company failed to acquire/hold the lands on or before 18.9.1993. But the company filed a revision petition before the Tamil Nadu Land Reforms Special Appellate Tribunal. Even while dismissing the revision petition on 2.5.1995, the Tribunal granted liberty to the company to apply afresh to the Government. Accordingly, the company applied afresh for permission under Section 37-A on 22.8.1995 and the Government passed G.O.Ms. No. 614, Revenue (L.R.II(1)) Department, dated 9.7.1996, granting permission to the company to hold an extent of 600.10 acres so far purchased by the company, from out of 859.01 acres already allowed under the earlier Government Order of the year 1991.
(m) It is relevant to point out that the exemption under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, was sought for by M/s. Dalmiya Cements (Bharat) Ltd. in its own name and not in the name of the subsidiary companies, though part of the lands were acquired in the names of those companies.
(n) After the publication of the declarations, under Section 6 of the Act, 28 writ petitions were filed by M/s. Dalmiya Cements (Bharat) Ltd. challenging the notifications issued under Section 4(1) of the Act as well as the declarations published under Section 6 of the Act.
(o) Similarly, M/s. Madras Cements Ltd. filed 10 writ petitions, M/s. Nilgiris Cements Ltd. filed 6 writ petitions, M/s. Grasim Industries Ltd. filed 4 writ petitions, M/s. Alagappa Cements Ltd. filed 3 writ petitions, M/s. K.G.M.Minerals Pvt. Ltd. filed 2 writ petitions and 7 individuals filed separate writ petitions.
(p) All the 60 writ petitions were dismissed by the learned Judge by a common order dated 16.12.2002 and it is against the said common order that the above writ appeals have been filed.
3. As the grounds of challenge in all the writ appeals remain the same and hence they are dealt with in common. Mr. Shanthi Bhushan, learned senior counsel appearing for the appellants M/s. Dalmiya Cements (Bharat) Ltd. contended -
(a) that the entire land acquisition proceedings are vitiated by mala fides and colourable exercise of power, inasmuch as the exploitation of mines and minerals are governed by the Mines and Minerals (Regulation and Development) Act, 1957 and the State Government is not entitled to circumvent the procedure of obtaining the approval of the Central Government for carrying on mining operations, prescribed under the said Act, by resorting to acquisition proceedings under the Land Acquisition Act;
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(b) that after the deletion of Rule 58 of the Mineral Concession Rules, 1960, with effect from 13.4.1988 under an amendment, the reservation made under the said rule by the Government of Tamil Nadu in favour of TANCEM under G.O.Ms. No. 921, Industries dated 25.8.1986, did not survive;
(c) that after the introduction of Section 17A in the Mines and Minerals (Regulation and Development) Act, with effect from 10.2.1987 by way of an amendment, the State Government cannot acquire a land for mining operations without obtaining the approval of the Central Government;
(d) that the State Government, after having granted permission to acquire land to the appellant under Section 37A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, is barred by the principles of "Promissory estoppel" from initiating acquisition proceedings;
(e) that the acquisition proceedings are not for a public purpose, inasmuch as TANCEM has been declared as a sick company by the proceedings of the Board for Industrial and Financial Reconstruction, in its proceedings dated 18.6.2003 after recording a statement from the Government that it had decided to disinvest its stake in TANCEM, which would go to show that the actual purpose of continuing the land acquisition proceedings, is to pass on the land to third parties that would acquire TANCEM and the acquisition proceeding are motivated.
(f) that since the acquisition proceedings are not complete in view of the interim orders of stay of dispossession, and also since the Government had decided to disinvest its holding in TANCEM, some private company may acquire TANCEM and become a beneficiary of the acquisition proceedings, in violation of the special procedure prescribed under Part VII of the Land Acquisition Act for acquisition of land for private companies.
4. Mr. V.Suthakar, Mr. C.Prakasam, Mr. K.R.Krishnan and Mr. M.Balasubramaniam, learned Counsel appearing for the appellants in other writ appeals adopted the arguments of Mr. Shanthi Bushan, learned senior counsel. However, Mr. Satish Parasaran, apart from adopting the arguments of the learned senior counsel, also raised two additional contentions namely, that in most of the cases, the declaration under Section 6 of the Act, was published beyond the time limit stipulated under the Act and that the mandatory requirement of publication of the notifications in the Newspapers having circulation in the locality was violated, by making publications in Newspapers having no circulation in the area.
5. Per contra, Mr. R.Viduthalai, learned Advocate General appearing for the State Government as well as the beneficiary viz., TANCEM, contended -
(a) that there were no mala fides or colourable exercise of power on the part of the Government in initiating the land acquisition proceedings, since even two decades before the purchase of the lands in question by the appellants, the State Government had conducted a prospecting operations of the area through the State Geological Branch way back in the year 1975 and accepted the request of the Tamil Nadu Industrial Development Corporation Limited, (out of which TANCEM was born), for Page 2826 the acquisition of a large extent of land in the same area for the purpose of setting up a Cement Factory and exploitation of limestone and it is only on coming to know of the same, that the appellants played a pro-active role and took pre-emptive initiatives to acquire the land and sought permission for such acquisition;
(b) that despite the deletion of Rule 58 from the Mineral Concession Rules 1960, with effect from 13.4.1988, the reservation made by the Government under G.O.Ms. No. 921 dated 25.8.1986, continued in view of Rule 59 of the said Rules;
(c) that Section 17A of the Mines and Minerals (Regulation and Development) Act, 1957, introduced with effect from 10.2.1987 by way of amendment, occupies a different field and even if the said provision is invoked, the consent of the owner of the land is made necessary by Rule 22(3)(h) of the Mineral Concession Rules, 1960 and hence it would be a futile exercise to resort to the provisions contained in Mines and Minerals (Regulation and Development) Act, 1957;
(d) that the grant of permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, does not operate as a "promissory estoppel" since the permission itself was granted subject to various conditions and the same was also subject to the statutory provisions contained in Section 6(1)(c) of the Mines and Minerals (Regulation and Development) Act, 1957, and at any rate, the sequence of events shows that the appellants attempted to outsmart the Government by entering into the fray, long after the Government carried out prospecting operations and decided to acquire the land;
(e) that TANCEM has started making profits from the financial year 2002-2003 and had already shown positive signs of recovery and hence there is no proposal for the Government to disinvest its stake in TANCEM;
(f) that while the cement manufactured by private companies such as the appellants are sold in the market at the rate of Rs. 200/- per bag, the cement manufactured by TANCEM is sold at the rate of Rs. 145/- per bag and the entire production of TANCEM is used for consumption by the Government of Tamil Nadu for its public welfare projects, making it clear that the acquisition of land for the benefit of TANCEM is actually for a public purpose; and
(g) that in view of the decision taken by the Government not to disinvest its stake in TANCEM after finding TANCEM coming out of the woods, the question of third party private companies getting the benefit of acquisition and the consequential violation of the provisions of Part VII of the Land Acquisition Act, does not arise.
6. Before we devolve upon the contentions raised by Mr. Shanthi Bhushan, we would like to consider at first, the two additional submissions made by Mr. Sathish Parasan. In so far as the first additional contention regarding the publication of the declaration under Section 6 beyond the time limit, the list of dates contained in the impugned judgment of the single Judge are referable. From the dates mentioned in paragraphs-3 to 9 of the impugned judgment, it appears as though the declarations under Section 6 were published after the expiry of one year from the date of publication of the notification under Section 4(1) of the Act. But Page 2827 the learned Advocate General produced a detailed tabulation sheet containing the dates of last publication of the notifications under Section 4(1) and the dates of publication of Section 6 declaration in each case. As per this tabulation sheet, all the declarations under Section 6 were published within the time limit prescribed. The correctness of the particulars found in the said tabulation sheet filed by the learned Advocate General is not disputed by the learned Counsel for the appellants and hence the contention that Declaration under Section 6 were beyond the time limit fails.
7. In so far as the other additional contention namely, publication of notification in dailies having no wider circulation is concerned, it is seen that the publication of the notifications were made in Newspapers such as "Madurai Mani", "Dinamalar" etc. Though a specific ground had been raised by the appellants in their affidavits filed in support of the writ petition that these Newspapers had no wide circulation in the area, the learned Judge proceeded to reject the said contention on the ground that there were no pleadings. In the absence of details as to the circulation of the dailies, the conclusion reached by the learned Judge in this regard cannot be faulted. That apart, it is seen that all the appellants participated in the enquiry under Section 5-A of the Act and filed their objections. Therefore, the fact that the notifications were published in these Newspapers, did not really prejudice the appellants. In any event, 'Dinamalar' is a Newspaper, having wide circulation in the State and hence we are unable to persuade ourselves to accept this contention. Accordingly, we reject the same.
8. REGARDING MALA FIDE AND COLOURABLE EXERCISE OF POWER:
In order to test the tenability of the above contention, we must refer to the scheme of the Mines and Minerals (Regulation and Development) Act, 1957, the Mineral Concession Rules, 1960 issued thereunder and the scheme of the Land Acquisition Act, 1894, with reference to the provisions contained in the Constitution. Entry 54 in List-I (Union List) of the Seventh Schedule to the Constitution reads as follows:
54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
Entry 23 in List-II (State List) of the Seventh Schedule to the Constitution reads as follows:
23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.
Entry 42 in List-III (Concurrent List) of the Seventh Schedule to the Constitution reads as follows:
42. Acquisition and requisitioning of property.
9. Just as the Parliament, in exercise of the power conferred under Article 246 of the Constitution, enacted the Mines and Minerals (Regulation and Development) Act, 1957, it allowed the continuance of the Land Acquisition Act, 1894, to be in force by virtue of Article 372(1) of the Constitution and the said Act was also adapted by the President by Adaptation of Laws Order 1950, in exercise of the power conferred on him under Clause (2) of Article 372 of the Constitution. While the object of the Land Acquisition Act, 1894, as spelt out in its preamble is "to amend the law for the acquisition of land needed for Page 2828 public purposes and for companies", the object of the Mines and Minerals (Regulation and Development) Act, 1957, spelt out in Section 2 of the said Act is as follows: "It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided."
10. Section 13 of the Mines and Minerals (Regulation and Development) Act, 1957, empowers the Central Government to make rules for regulating the grant of prospecting licenses and mining leases in respect of minerals. But, Section 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases or other mineral concessions, in respect of minor minerals. Section 17 of the Act, confers special powers upon the Central Government to undertake prospecting or mining operations in certain lands. Section 17A, introduced by the Mines and Minerals (Regulation and Development) Amendment Act, 1986, which came into effect on 10.2.1987, empowered both the Central Government and the State Government to reserve any area for the purpose of conservation of minerals. But while doing so, Sub-section (1) of Section 17A made it necessary for the Central Government to "consult the State Government". On the other hand, Sub-section (2) of Section 17A made it necessary for the State Government to obtain the "approval of the Central Government". Thus, the provisions of Section 17A empowered the Central Government to reserve any area "after consultation with the State Government" and empowered the State Government as well to reserve any area "with the approval of the Central Government".
11. Section 24 of the Mines and Minerals (Regulation and Development) Act, 1957, empowered a person authorized by the Central Government to enter into and inspect any mine, and conduct a survey, take measurements and examine any person as well as all documents and records found therein. Section 24-A, again inserted, by the Mines and Minerals (Regulation and Development) Amendment Act (Act 37 of 1986), with effect from 10.2.1987, made it lawful for the holder of a prospecting license or mining lease issued under the Act, to enter the land over which such license or lease had been granted and carry out all such prospecting and mining operations as may be prescribed. The holder of a prospecting license or mining lease is liable only to pay compensation to the occupier of the surface of the land covered by such license or lease, for any loss or damage arising out of the mining or prospecting operations, by virtue of Sub-section (2) of Section 24-A. But the power to determine the amount of compensation is vested with the State Government under Sub-section (3) of Section 24-A.
12. It is in the teeth of the aforesaid provisions of Sections 2, 13, 17, 17A, 24 and 24-A of the Mines and Minerals (Regulation and Development) Act, 1957, that the learned senior counsel for the appellants contends that the invocation of the provisions of the Land Acquisition Act by the State Government is a colourable exercise of power and is vitiated by mala fides.
13. It is true that apart from indicating the scope, purpose and ambit of the Act in the preamble itself, the Mines and Minerals (Regulation and Development) Act, 1957, also contains a declaration contemplated by Entry 54 of List-I (Union List) under the VII Schedule to the Constitution, indicating the importance of Page 2829 the piece of legislation. But the entire scheme of the Act, deals only with the right of exploitation of the mines, regulation of the mines and the development of minerals. While the Act empowers the State Governments to make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals, the power to make rules for regulating the grant of prospecting licenses and mining leases in respect of other minerals is reserved for the Central Government. Section 17A of the Act, makes it incumbent upon the Central and State Governments to work in close coordination with each other, when they want to reserve any area for conservation or for undertaking prospecting or mining operations. This can be well appreciated by looking into the manner in which the powers of the Central and State Governments are drafted under Section 17A, which reads as follows:
Section 17A. Reservation of area for purposes of conservation.-(1) The Central Government, with a view to conserving any mineral and after consultation with the State Government, may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.
(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or Corporation owned or controlled by it or by the Central Government and where it proposes to do so, it shall, by notification in the official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.
(3) Where in exercise of the powers conferred by Sub-section (2) the State Government undertakes prospecting or mining operations in any area in which the minerals vest in a private person, it shall be liable to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease.
14. By the same Amendment Act 37 of 1986, Section 24-A was also incorporated into the Mines and Minerals (Regulation and Development) Act, 1957, which reads as follows:
Section 24-A. Rights and liabilities of a holder of prospecting licence or mining lease.-(1) On the issue of a prospecting licence or mining lease under this Act and the rules made thereunder, it shall be lawful for the holder of such licence or lease, his agents or his servants or workmen to enter the lands over which such lease or licence had been granted at all times during its currency and carry out all such prospecting or mining operations as may be prescribed:
Provided that no person shall enter into any building or upon an enclosed Court or garden attached to a dwelling-house Page 2830 (except with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so.
(2) The holder of a prospecting licence or mining lease referred to in Sub-section (1) shall be liable to pay compensation in such manner as may be prescribed to the occupier of the surface of the land granted under such licence or lease for any loss or damage which is likely to arise or has arisen from or in consequence of the mining or prospecting operations.
(3) The amount of compensation payable under Sub-section (2) shall be determined by the State Government in the manner prescribed.
15. A conjoint reading of Sections 17A and 24-A makes it clear that (a) the Central Government in consultation with the State Government or (b) the State Government with the approval of the Central Government may reserve any area for conservation and also undertake prospecting or mining operations. For the purpose of undertaking prospecting or mining operations, the holder of a prospecting license or mining lease, is empowered to enter any land over which such lease or license has been granted and carry out all such prospecting or mining operations.
16. Thus the entire scheme of the Mines and Minerals (Regulation and Development) Act, 1957, does not deal either with the acquisition of ownership of the land over which any license or lease is granted or with the surface rights on the land. In particular, the proviso under Section 24-A prohibits the holder of a license or lease from entering into any building or upon an enclosed Court or garden attached to a dwelling house (except with the consent of the occupier) without giving a prior notice. Consequently, the ownership of the land is to remain untouched and the holder of a license or lease is liable to vacate the land either on the expiry or termination of the lease or license or after exhaustion of the mineral resources. From a close scrutiny of these provisions, it appears that the holder of a prospecting license or mining lease under the Act, cannot exercise any right over and above what is prescribed by general or special order issued by the Central Government under Section 24 of the Act.
17. Section 24 of the Act empowers any person authorized by the Central Government by general or special order to -
(a) enter and inspect any mine;
(b) survey and take measurements in any such mine;
(c) weigh, measure or take measurements of the stocks of minerals lying at any mine;
(d) examine any document, book, register, or record in the possession or power of any person having the control of, or connected with, any mine and place, marks of identification thereon, and take extracts from or make copies of such document, book, register or record;
(e) order the production of any such document, book, register, as is referred to in Clause (d); and
(f) examine any person having the control of, or connected with any mine.
18. Consequently, if the State Government or Central Government wishes to develop any area identified as a mine, put up factories for processing the Page 2831 minerals mined or quarried, build storage space for the minerals excavated and construct buildings for locating offices and residential houses for the employees engaged in connection with the said operations, the Mines and Minerals (Regulation and Development) Act, 1957, does not provide any scope for the same. Keeping this lacunae in the scheme of Mines and Minerals (Regulation and Development) Act, 1957, in mind, if we look into the various Government Orders issued by the State, we could find an answer as to why the State Government did not think fit to proceed under the provisions of Section 17A(2) read with Section 24-A of the said Act.
19. Paragraph-2 of the earliest Government Order G.O.Ms. No. 679, Industries Department, dated 26.5.1977, dealt with the request made by the Tamil Nadu Industrial Development Corporation Limited, for the acquisition of lands. The purposes for which the acquisition was sought for, is indicated in the said paragraph-2 as " mining limestone, setting up the factory etc., and for provision of Railway siding for the cement plant". It is in pursuance of the acceptance of the said request that the next order dated 25.8.1986, was passed reserving the area by invoking Rule 58 of the Mineral Concession Rules, 1960. The subsequent orders dated 1.2.1993 and 6.7.1994, under which administrative sanction was granted for the acquisition of the lands, were only in pursuance of the purpose spelt out in the earliest order. Hence, it is clear that the purpose for which the State Government resorted to acquisition proceedings under the Land Acquisition Act, 1894, was actually wholesome and composite, which could not have been achieved by the State Government by resorting to the procedure prescribed under Mines and Minerals (Regulation and Development) Act, 1957. Hence the contention that the State Government resorted to the provisions of the Land Acquisition Act, 1894, in order to circumvent the requirement of approval by Central Government under Section 17A(2) of the Mines and Minerals (Regulation and Development) Act, 1957, cannot be accepted. Consequently, the invocation of the provisions of the Land Acquisition Act, 1894, by the State Government cannot be termed as a colourable exercise of power.
20. Moreover, the sequence of events, also belie any mala fides on the part of the State Government in resorting to the Land Acquisition Act, 1894. While the request for acquisition of lands made by Tamil Nadu Industrial Development Corporation Limited, for "mining limestone, setting up factory and providing Railway siding for the cement plant" was made way back on 13.8.1975 and 7.6.1976, as seen from the references in G.O.Ms. No. 679, Industries Department, dated 26.5.1977, and the same was accepted by the Government on 26.5.1977, the reservation of the area was also made under G.O.Ms. No. 921, Industries (M2) Department, dated 25.8.1986. On the said date viz., 25.8.1986, Section 17A(2) of the Mines and Minerals (Regulation and Development) Act, 1957, was not available in the Statute Book. The said Sub-section got inserted only with effect from 10.2.1987 under the Amendment Act 37 of 1986. Rule 58 of the Mineral Concession Rules, 1960, which empowered the State Government to make reservation, was very much available on the crucial date viz., 25.8.1986 and it came to be deleted only with effect from 13.4.1988. Therefore the State Government acted well within its rights in invoking the provisions of the Land Acquisition Page 2832 Act, 1894, after making a reservation in exercise of the power conferred under Rule 58 of the Mineral Concession Rules, 1960 and hence it cannot be termed either mala fide or colourable exercise of power.
21. The learned Advocate General also contended that Rule 22(3)(h) of the Mineral Concession Rules, 1960, required that an application for the renewal of a mining lease shall be accompanied by a statement in writing from the applicant, that he had obtained surface rights over the area or had obtained the consent of the owner of the land, if he himself was not the owner of the land. The said Rule 22(3)(h) of the Mineral Concession Rules reads as follows:
22. Applications for grant of mining leases (3)(i) Every application for the grant of renewal of a mining lease shall be accompanied by-
.. .. .. .. .. ..
.. .. .. .. .. ..
(h) a statement in writing that the applicant has, where the land is not owned by him obtained surface rights over the area or has obtained consent of the owner for starting mining operations.
Therefore, according to the learned Advocate General, if the owner of the land in respect of which a prospecting license or mining lease is granted, refuses to give his consent, an application for renewal of the grant cannot be considered and this is the reason why the State Government resorted to the provisions of the Land Acquisition Act, 1894. But as rightly contended by Mr. Shanthi Bushan, the learned senior counsel, when Sections 24 and 24-A of the Act confer powers upon a person authorized by the Central Government to enter into any land and carry out mining operations, Rule 22(3)(h) of the Mineral Concession Rules, 1960, cannot annul the effect of the provisions of the Act. The Rules form part of a subordinate legislation and they cannot override the provisions of an Act. In any event, Clause (h) of Sub Rule (3) of Rule 22 was incorporated only by an amendment dated 20.2.1991, but the earliest decision to resort to land acquisition proceedings had been taken way back in the year 1977. Therefore, Rule 22(3)(h) does not provide the answer to the first contention of the learned senior counsel.
22. Both the Mines and Minerals (Regulation and Development) Act, 1957, as well as the Land Acquisition Act, 1894, are Parliamentary Enactments. Both of them operate for different purposes and occupy different fields. The question of circumventing the provisions of one of those Acts, would arise only if the State Government had resorted to its own law making power or invoked any provisions of a State Enactment. Even in cases where the State Governments had resorted to their own law making power, such actions had not been held to be mala fide or colourable exercise of power by Courts.
23. In Smt. Elizebath Samuel Aaron and Ors. v. State of Kerala and Ors. , the Full Bench of the Kerala High Court had an occasion to test the validity of a State Act, in the light of the provisions of Mines and Minerals (Regulation and Development) Act, 1957. In the said case, a private company by name The Super Clays and Minerals Mining Company (Private) Page 2833 Limited, was taken over by the State Government, under an enactment called The Super Clays and Minerals Mining Company (Private) Limited, (Acquisition of Undertakings) Act, 1984. The validity of the said Act was challenged, on several grounds, one of which, was that the Act relates to a field occupied by the Central Legislation viz., The Mines and Minerals (Regulation and Development) Act, 1957 and that in view of the declaration made by Parliament under Section 2 of Act 67 of 1957, as envisaged in Entry 54 of List-I of the VII Schedule to the Constitution, the State Legislature was incompetent to enact the law in question. Dealing with the said objection in paragraph-38 of the judgment, the Full Bench of the Kerala High Court held as follows:
38. We shall now take up the second limb of the argument based on Entry 54 of the Union List and the declaration made by Parliament in Section 2 of the Mines and Minerals Regulation Act. Entry 54 is in these terms:
Regulation of mines and minerals development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
Section 2 aforesaid which contains the declaration reads:
2. Declaration as to expedience of Union control. It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided.
The declaration is specific that the Union takes under its control only the regulation of mines and the development of minerals and that too, "to the extent hereinafter" provided in the Act. What the Mines and Minerals Regulation Act provides is only the regulation of mines by making general provisions regarding prospecting and mining operations, grant of leases, licensing, supervision and control. It only regulates the working of the mines in whomsoever hands they may be. It does not deal with acquisition of a mine or with the ownership and control thereof, though every owner of a mine will have to subject himself to the regulations under the Act, regarding its operation, the prospecting, the mining and the like. The Mines and Minerals Regulation Act thus operates in a field totally different from the field in which the impugned Act operates, namely acquisition of an undertaking and therefore dealing with ownership. For this reason alone, it has to be held that the declaration under the Mines and Minerals Regulation Act does not operate so as to bar the State legislature from exercising its powers to legislate for acquisition of any mine under Entry 42 of the Concurrent List. The field occupied by the impugned Act is not one occupied by the Central legislation.
39. It must also be noted that the declaration under the Mines and Minerals Regulation Act operates only to the extent provided in the Act. In the absence of any provision in the said Act relating to acquisition of mines, the field was still open for the State legislature to enact the impugned Act. What is covered by a Parliamentary declaration alone is within the sphere of Parliament and the rest are within the sphere of the State Legislature. The latter stands excluded only if, and to the extent, covered by any declaration by Parliament."
Page 2834
24. In State of Haryana and Anr. V. Chanan Mal the Supreme Court had an occasion to consider whether the Haryana Minerals (Vesting of Rights) Act (48 of 1973) was repugnant to Mines and Minerals (Regulation and Development) Act, 1957. In the said case, the State of Haryana declared a mineral known as "Saltpetre" as a minor mineral and used to auction the same. But the Punjab and Haryana High Court held that the ownership of these mineral deposits vested in the owners of the lands, In order to overcome the hurdle created by the said judgment, the State of Haryana enacted the Haryana Minerals (Vesting of Rights) Act (48 of 1973) and the validity of the said Act was challenged by the owners of the land successfully before the High Court. Therefore the State went on appeal to the Supreme court. The sheet anchor of the case of the land owners was that the Haryana Act was beyond the competence of the State Legislature in as much as the field on which the Act operated was necessarily occupied already by the provisions of the Central Act enacted under Entry 54 of the Union List of the Seventh Schedule to the Constitution. Even while formulating the question to be addressed in the case, in para 5 of the said Judgment, the 4 Judges Bench of the Supreme Court held that "the real question, however, was not whether any of the purposes of the two Acts were common, but whether the provisions of the Central Act so operated as necessarily to exclude, in carrying out their objects, the operation of the State Act". After clearly holding in para 23 of the judgment that "the power to acquire for purpose of development and regulation has not been exercised by Act 67 of 1957" and that "till the Parliament legislates to acquire land in a State, the field is free for State legislation falling under the express provisions of Entry 42 of List III", the Supreme Court went on to clinch the issue in para 33 of the judgment as follows:
33. We are particularly impressed by the provisions of Sections 16 and 17 as they now stand. A glance at Section 16(1)(b) shows that the Central Act 67 of 1957 itself contemplates vesting of lands, which had belonged to any proprietor of an estate or tenure holder either on or after 25th October, 1949, in a State Government under a State enactment providing for the acquisition of estates or tenures in land or for agrarian reforms. The provisions lay down that mining leases granted in such land must be brought into conformity with the amended law introduced by Act 56 of 1972. It seems to us that this clearly means that Parliament itself contemplated State legislation vesting of lands containing mineral deposits in the State Government. It only required that rights to mining granted in such land should be regulated by the provisions of Act 67 of 1957 as amended. This feature could only be explained on the assumption that Parliament did not intend to trench upon powers of State Legislatures under Entry 18 of List II, read with Entry 42 of List III. Again, Section 17 of the Central Act 67 of 1957 shows that there was no intention to interfere with vesting of lands in the States by the provisions of the Central Act.
25. From the analysis of the law declared by the Supreme Court, it is clear that the power of the State Government even to enact a law in exercise of the power conferred by Article 246 read with Entry No. 42 of List-III of the Seventh Schedule to the Constitution, for the acquisition of any mines, is not repugnant or inconsistent to the power of the Central Government to regulate mines Page 2835 under the Mines and Minerals (Regulation and Development) Act. Whileso, the mere action on the part of the State Government in resorting to land acquisition proceedings for the acquisition of land, for the purpose of mining operations, cannot be termed as mala fide or colourable exercise of power, much less an act to circumvent the provisions of the Act 67 of 1957. Applying the ratio laid down by the Apex court in the aforesaid decision, it can be concluded that the right reserved by the Central Government for regulation of mines, under Act 67 of 1957, does not trench upon the powers of the State Government to exercise its powers under the Land Acquisition Act, 1894 for the acquisition of any land including the land containing minerals.
26. The argument that the Amendment Act 37 of 1986 received the assent of the President on 22-8-1986 but the same was notified on 10-2-1987 and that the State Government hurriedly issued the order reserving the area on 25-8-1986 under G.O.Ms. No. 921, making it a colourable exercise of power, does not, in our opinion, merits acceptance, in view of the law laid down by the Supreme Court that the question is one of competence of the legislature and not one of motive. That apart, so long as the public purpose subserves, the acquisition proceedings cannot be termed as mala fide exercise of power.
27. REGARDING THE SURVIVAL OF THE RESERVATION MADE UNDER RULE 58 AFTER ITS DELETION:
It is the contention of the learned Senior Counsel for the appellants that the power conferred upon the State Government for reserving any area under Rule 58 of the Mineral Concession Rules, 1960, stood deleted by an amendment with effect from 13-4-1988 without any saving clause and that therefore the reservation made by the State Government in G.O.MS. No. 921, dated 25-8-1986 was brought to an end automatically on 13-4-1988. Rule 58 as it stood before its deletion with effect from 13-4-1988 reads as follows:
58. Reservation of areas for exploitation in the public sector, etc.---The State Government may, by notification in the official Gazette, reserve any area for exploitation by the Government, a corporation established by any Central, State or Provincial Act or a Government company within the meaning of Section 617 of the Companies Act, 1956 (1 of 1956).
In support of the said contention, the learned Senior Counsel invited our attention to the judgment of the Supreme court in Kolhapur Canesugar Works Ltd. v. Union of India of which, the Apex court held that "the normal effect of repealing a statute or deleting a provision is to obliterate it from the Statute book as completely as if it had never been passed and the statute must be considered as a law that never existed". According to the learned Senior Counsel, the only exception to the said rule is engrafted in Section 6(1) of the General Clauses Act, but the said exception is available only to a repeal of central enactments or regulations and not to the deletion of rules.
Page 2836
28. But according to the learned Advocate General, an answer to the said submission is found in Rule 59 of the Mineral Concession Rules 1960 and the law laid down by the Supreme court in Indian Metals and Ferro Alloys Ltd v. Union of India 1992 Suppl (1) SCC 91.
The relevant portion of Rule 59(1) of the said rules reads as follows:
59. (1) No area---
(a) ... ... ... or
(b) ... ... ... or
(c) ... ... ... or
(d) ... ... ... or
(e) which has been reserved by the State Government or under Section 17A of the Act, shall be available for grant unless -
(i) an entry to the effect that the area is available for grant is made in the register referred to in Sub-rule (2) of Rule 7D or Sub-rule (2) of Rule 21or Sub-rule (2) of Rule 40, as the case may be; and
(ii) the availability of the area for grant is notified in the official gazette and specifying a date (being a date not earlier than 30 days from the date of publication of such notification in the official gazette) from which such area shall be available for grant Provided that ... ... ...
PROVIDED FURTHER that where an area reserved under Rule 58 or under Section 17A of the Act is proposed to be granted to a Government company, no notification under Clause (ii) shall be required to be issued.
29. Dealing with the impact of the introduction of Section 17-A(2) in the Act followed by the deletion of Rule 58, the Supreme Court held in Indian Metals and Ferro Alloys Ltd's case in paragraphs 46 and 47 as follows:
46. Before leaving this point, we may only refer to the position after 1986. Central Act 37 of 1986 inserted Sub-section (2) which empowers the State Government to reserve areas for exploitation in the public sector. This provision differs from that in Rule 58 in some important respects--
(i) the reservation requires the approval of the C.G.;
(ii) the reservation can only be of areas not actually held under a PL or ML;
(iii) the reservation can only be for exploitation by a government company or a public sector corporation (owned or controlled by the S.G. or C.G.) but not for exploitation by the government as such.
Obviously, Section 17-A(2) and Rule 58 could not stand together as Section 17-A empowers the S.G. to reserve only with the approval of the C.G. While Rule 58 contained no such restriction. There was also a slight difference in their wording. Perhaps because of this Rule 58 has been omitted by an Page 2837 amendment of 1988 (G.S.R. 449-E of 1988) made effective from April 13, 1988. Rule 59, however, contemplates a relaxation of the reservation only by the C.G. By an amendment of 1987 effective on February 10, 1987 (G.S.R.86-E of 87), the words "reserved by the State Government" were substituted for the words "reserved by the Government" in Rule 59(1)(e). Later Rule 59(1) has been amended by the insertion of the words "or under Section 17-A of the Act" after the words "under Rule 58" in Clause (e) as well as in the second proviso. The result appears to be this:
(i) After April 13, 1988, certainly, the S.G. cannot notify any reservations without the approval of the C.G., as Rule 58 has been deleted. Presumably, the position is the same even before this date and as soon as Act 37 of 1986 came into force.
(ii) However, it is open to the S.G. to denotify a reservation made by it under Rule 58 or Section 17-A. Presumably, dereservation of an area reserved by the S.G. after the 1986 amendment can be done only with the approval of the C.G. for it would be anamalous to hold that a reservation by the S.G. needs the C.G.'s approval but not the dereservation. Anyhow, it is clear that the relaxation in respect of reserved areas can be permitted only by the C.G.
(iii) It is only the C.G. that can make a reservation with a view to conserve minerals generally but this has to be done with the concurrence of the S.G.
47. We are concerned in this case with reservations made by the S.G. under Rule 58 before 1986 which, there is no reason to doubt, continue in force even after the introduction of Section 17-A. These, as pointed out above, can be dereserved by the S.G. but a relaxation can be done by the C.G. only. We shall consider later whether this power of the C.G. can be or has been or should be exercised in this case. It is sufficient to observe here that reservations notified in 1977 do not necessarily vitiate the grant of leases to private parties.
30. From the law laid down by the Apex Court in paragraphs-46 and 47, it is clear that the reservation made by the State Government under Rule 58 continued to be in force even after its deletion or after the introduction of Section 17-A(2). The absence of a saving clause does not really alter the position, since it is only in cases where the proceedings initiated under a rule are half way through that a saving clause is required to enable their continuance. Where an act has been completed, under a particular rule, it does not become invalidated, due to the absence of a saving clause. Therefore the second contention that the reservation made by the State Government did not survive after the deletion of Rule 58, cannot be accepted.
31. AFTER THE INTRODUCTION OF SECTION 17-A, THE LAND ACQUISITION PROCEEDINGS ARE ULTRA VIRES THE MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957:
It is the contention of the learned senior counsel for the appellants that the public purpose declared by the State Government in the notifications issued under Section 4(1) of the Land Acquisition Act, 1894, is "for mining limestones in favour of Tamil Nadu Cements Corporation Limited". Such a public purpose virtually tantamounts to acquisition of ownership of lands as well as reservation of the area for mining Page 2838 operations. Therefore, the approval of the Central Government under Section 17-A of the Mines and Minerals (Regulation and Development) Act, 1957 was indispensable and the notifications issued without the approval of the Central Government, are ultra vires the Act 67 of 1957. In support of the said contention, the learned senior counsel relied upon the decision of the Supreme Court in Indian Express Newspapers (Bombay) Private Limited v. Union of India , in para-73 of which, it was held that a subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition, it may also be questioned on the ground that it is contrary to some other Statute. In other words, the notifications issued under the Land Acquisition Act, 1894, are sought to be challenged on the ground that they are contrary to Act 67 of 1957.
32. We are unable to countenance the said contention, since the proceedings for acquisition are intended for transfer of ownership and vesting of the lands in the Government. It is akin to the purchase of a land, with the only difference that normally it is a forced purchase by the State, from an unwilling vendor. The logical extension of the argument that a land cannot be acquired for mining operations without the approval of the Central Government, would be that all transactions in respect of those lands even among private parties, cannot go through without the approval of the Central Government. Such a consequence is not intended by Section 17(2) of Act 67 of 1957. As discussed in earlier paragraphs, the acquisition of land is a field occupied by the Land Acquisition Act, 1894 and the grant of prospecting licenses or mining leases, is a field occupied by Act 67 of 1957. The boundaries within which each of them operate, are different and they do not encroach into each other's field. This is why, the Supreme Court had already declared that there is no repugnancy between the two enactments, in the Haryana case AIR 1976 SC 1654.
33. RELATING TO 'PROMISSORY ESTOPPEL' AND LEGITIMATE EXPECTATION:
It is the contention of the learned senior counsel for the appellants that after having granted permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, under G.O.Ms. No. 1255, Revenue Department, dated 19.9.1991, and after granting a similar permission under G.O.Ms. No. 614, Revenue (LR.II(1)) Department, dated 9.7.1996, the Government was barred by the principles of 'Promissory Estoppel'. Having obtained exemption under Section 37-A the appellants had the legitimate expectation that the lands purchased by them would be allowed to be utilised for mining purposes.
34. In support of the said contention, the learned senior counsel relied upon the decision of the Supreme Court in Shrijee Sales Corporation and Anr. v. Union of India , to the effect that the principle of promissory estoppel is applicable against the Government except in case where there is Page 2839 public equity. The Supreme Court laid down two propositions in the said case viz., (a) that the determination of the applicability of promissory estoppel against public authority/Government, hinges upon balance of equity or public interest and (b) that it is for the Court to determine whether the Government should be held exempt from the liability of the promise.
35. In order to test the applicability of the principle of promissory estoppel, we may have to analyse the factual aspects of the case and find out (i) if there was a promise on the part of the Government (ii) if so, what was the nature of the promise and (iii) if the Government should be compelled to stick to the promise.
36. As seen from the sequence of events narrated in para-2 above, it was the Tamil Nadu Industrial Development Corporation Limited, which made a request way back in the year 1975 and 1976, for the acquisition of the lands in the area in question for "mining limestone, setting up a factory and putting up a Railway siding for locating a cement plant". The Government accorded administrative sanction for the project under G.O.Ms. No. 679, Industries dated 26.5.1977, after getting a report from the State Geological Branch which made a detailed prospecting operation of the area in 1975 itself. The reservation of the area by the State Government and the initiation of the acquisition proceedings, followed as a corollary and the appellants entered the fray, only after the entry of Tamil Nadu Industrial Development Corporation Ltd. in so far as the lands in question are concerned. It is not as though the Government entered the field after getting scent of the Research and Development done by the appellants in the area. On the other hand, the appellants followed the Government (in so far as the present lands are concerned) and hence the appellants were always aware of the proposals pending with the Government from 1975-76. Under such circumstances, the State Government cannot be taken to have made any promise to the appellants.
37. Even if the State Government is taken to have made any promise, by virtue of granting permission under Section 37-A of Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, the promise could be taken only in the context of the said Land Reforms Act and not beyond the scope of the said Act. In other words, the promise held out by the Government in its orders under Section 37-A, is only to the effect that their lands would not be treated to be in excess of the ceiling limit. The Government is bound by the said promise not to apply the provisions of the Land Reforms Act and take away the land in excess of the ceiling limit. The permission granted under Section 37-A, cannot be taken to be a promise, not to acquire the land of the appellants and consequently, the theory of legitimate expectation put forth by the appellant has no ground to stand.
38. Moreover, the original permission granted to the appellant under G.O.Ms. No. 1255, Revenue dated 19.9.1991, was for a period of two years and admittedly, the appellants did not purchase the entire lands as per the said permission, within the said period. Their petition for extension of time was rejected by the Government, forcing them to approach the Tamil Nadu Land Reforms Appellate Tribunal. The Tribunal, even while dismissing the petition, permitted the appellants to make a fresh application and the same was granted by the Government under G.O.Ms. No. 614 Revenue dated Page 2840 9.7.1996. Thus, the permission originally granted on 19.9.1991 had lapsed on 18.9.1993 and on account of this, the mining lease application of the appellant was also rejected under G.O.Ms. No. 49, Industries dated 10.2.1994. It is only thereafter that the subsequent order in G.O.Ms. No. 614, Revenue dated 9.7.1996 was passed. Therefore, during the period from 19.9.1993 to 9.7.1996, there was no permission available for the appellants under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961. It is pertinent to point out that all the notifications under Section 4(1) of the Land Acquisition Act, 1894, came to be issued only during this period viz., September 1993 to March 1996. To put it in other words, even if the grant of permission under Section 37-A is presumed to be a promise (which in fact it was not), it was not in force at the relevant point of time when the acquisition proceedings were initiated.
39. As seen from the very decision of the Supreme Court relied upon by the appellants, the enforcement of the promise against the Government, hinges upon balance of equity or public interest. The said principle was also reiterated by the Supreme Court in Hira Tikkoo v. Union Territory, Chandigarh , wherein the Supreme Court held that "overriding public interest outweighs the obligation of a promise or representation made on behalf of the administration."
40. In Chandrawati Devi v. State of Haryana 1995 Supp. (2) SCC 54, the Supreme Court dealt with a case where a land owner was permitted by the State of Haryana to develop his land into a colony, after granting exemption under the provisions of Section 9 of the Haryana Development and Regulation of Urban Areas (Amendment) Act, 1988. Many persons purchased plots from the land owner, after the development of the colony. But subsequently, the Government issued notification under Section 4(1) of the Land Acquisition Act, 1894, and the same was challenged on the ground of promissory estoppel. Dealing with the said contention, the Supreme Court held in para-3 of the judgment as follows:
It is true that the predecessor of the petitioners had exemption of the lands under Section 9 for colonization under Section 3 of the Haryana Development and Regulation of Urban Areas (Amendment) Act, 1988. The exemption was only to enable them to construct the colony, otherwise than in accordance with Section 3 of that Act, in which the owner of the lands should have to obtain a license to establish the colony in accordance with the provisions of the Act and the rules made thereunder. The exemption therefore stands as no impediment when the Governor is satisfied that self same land is needed for any other public purpose.
41. Therefore, in our considered view, (1) there was no promise on the part of the Government, in as much as the Government never promised not to acquire the land of the appellants, (2) the permission granted under Section 37-A for the purpose of Land Reforms Act, even if construed as a promise, had lapsed on 18.9.1993 and was not available during the period from Page 2841 September 1993 to July 1996, during which time all the acquisition notifications had been issued and (3) at any rate, the overriding public interest in making TANCEM viable, outweighed the obligation of a promise, even if there was any.
42. TANCEM HAD BEEN DECLARED AS A SICK COMPANY:
It is the contention of the learned senior counsel for the appellant that TANCEM had been declared as a sick company by the proceedings of BIFR dated 18.6.2003, after recording a statement from the State Government that they had decided to disinvest its stake in TANCEM. Therefore, it is the contention of the appellants that the lands once acquired, would actually pass on to private parties after disinvestment. In this context, the learned senior counsel would rely upon the judgment of the Apex Court reported in AIR 1963 SC 151.
43. We are unable to accept the said contention also for the following reasons:
(i) What is under challenge in the writ petitions and writ appeals, are the acquisition proceedings of the year 1993 to 1996. The alleged proceedings of the BIFR are dated 18.6.2003 and such a subsequent event, cannot make the notifications issued during the period 1993 to 1996, bad in law.
(ii) In any event, the learned Advocate General brought to our notice a policy note submitted by the Government for the year 2003-2004, in the floor of the Assembly, where it was stated that though the unit incurred losses, upto the year 2001-2002, it started making profits from 2002-2003. The policy note also recorded the fact that TANCEM fixed the sale price of cement at a very lower rate and enabled the Government to make a lot of savings in its projects. Even in the policy note for the year 2006-2007, in response to demand No. 27, the Government reported that they had undertaken modernization measures and initiated the process of getting ISO 9001-2000 Certification. Therefore according to the learned Advocate General, there is no proposal to disinvest the stake of the Government in TANCEM, as it had already come out of the woods.
Under such circumstances, we are unable to accept the submission that the Government would disinvest its stake and make private parties, the beneficiaries of the acquisition proceedings. The judgment relied on by the learned senior counsel is of no support on the facts of the case.
44. THE DISINVESTMENT IN TANCEM WOULD BENEFIT A PRIVATE COMPANY WHICH WOULD BE VIOLATIVE OF PART VII OF THE LAND ACQUISTION ACT:
According to the learned Senior Counsel for the appellants, the acquisition proceedings are not yet complete in view of the stay of dispossession granted in favour of the appellants during the pendency of the writ petitions and writ appeals. Under Section 16 of the Act, the land vests with the government only after possession is taken and since there is stay of dispossession, the proceedings are not yet complete. Therefore the decision of the Government at this stage, to disinvest its stake, would result in a private party acquiring TANCEM, thereby making the acquisition cease to be for a public purpose within the meaning of Section 3(f)(iv) of the Land Acquisition Act. If such an event happens, the acquisition would then be for a private company, which could not be made without complying with the requirements of Part VII of the Act.
Page 2842
45. In view of the categorical statement made by the learned Advocate General, on the basis of a policy note submitted on the floor of the Legislative Assembly, to the effect that the Company TANCEM has started making profits and that there is no proposal for the Government to disinvest its stake, the sixth contention has only become a matter of presumption. The sixth contention of the learned senior counsel for the appellants, does not survive any longer in view of the change of policy of the Government not to disinvest its stake. Therefore, we are unable to accept the said contention also.
46. Before concluding, we may have to add that in so far as the appeals of M/s. Dalmiya Cements (Bharat) Limited are concerned, the appellant suffers from two additional dis-advantages. Though they sought permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, in their own name, they purchased the lands admittedly, in the names of their subsidiary companies by name M/s. Anoopama Investment Limited, M/s. Poonam Finance Limited and M/s. Kanika Investments Limited. In other words, the companies in whose names M/s. Dalmiya Cements (Bharat) Ltd. purchased the lands, did not enjoy the permission under Section 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, and the subsidiary companies have also not challenged the acquisition proceedings.
47. For the foregoing reasons, we find no merits in the writ appeals and the writ appeals are dismissed, without any order as to costs. Consequently, connected WAMPs are also dismissed.