Supreme Court Orders Payment of Rs. 3.05 Crore in Land Acquisition Case; Orders State of Himachal Pradesh to Compensate Landowners Within 15 Days

Court’s Decision:
The Supreme Court set aside the High Court’s direction that UltraTech Cement Ltd. pay the compensation amount determined in the Supplementary Award and ruled that Jaiprakash Associates Limited (JAL) was responsible for paying the landowners the compensation. The court directed the State of Himachal Pradesh and the Land Acquisition Collector, Arki, to pay Rs. 3.05 crore to the landowners within 15 days and recover it from JAL, holding that the liability to pay fell on JAL, not UltraTech.

Facts:
In 2008, the Himachal Pradesh government issued a notification under the Land Acquisition Act, 1894, to acquire 56-14 bighas of land for creating a safety zone around a cement project of JAL. The Land Acquisition Collector (LAC), Arki, passed an initial award in 2018, determining compensation for the land at Rs. 10.77 crore. JAL deposited this amount and received possession of the land. The landowners filed a petition seeking additional compensation for damage to structures, trees, and crops, leading to the 2022 Supplementary Award. However, JAL argued that under a 2017 corporate arrangement, liabilities had transferred to UltraTech Cement Ltd.

Issues:

1. Whether JAL or UltraTech Cement was liable to pay the compensation determined under the Supplementary Award.
2. Whether the land should be returned to the original landowners if not used for the purpose stated during acquisition.

Petitioner’s Arguments:
UltraTech Cement argued that it was not liable to pay the compensation since JAL retained ownership of the land and the liability for the acquisition under the corporate arrangement approved by the National Company Law Tribunal (NCLT). JAL had already paid the 2018 award without contesting its liability. UltraTech also maintained that the land was not part of the assets transferred to it by JAL.

Respondent’s Arguments:
JAL contended that UltraTech should pay the compensation since the land formed an integral part of the cement project. JAL argued that UltraTech was responsible for maintaining the safety zone for the cement project.

Analysis of the Law:
The Supreme Court analyzed the corporate arrangement between JAL and UltraTech under the NCLT orders and the Land Acquisition Act. The court referred to Clause 7.1 of the corporate scheme, which clearly stated that any liabilities arising from legal proceedings initiated before the arrangement’s effective date (June 29, 2017) remained with JAL. Since the land acquisition proceedings began in 2008, the liability remained with JAL.

Precedent Analysis:
The Court emphasized previous rulings concerning land acquisition under eminent domain powers and the responsibility to pay compensation. The Court cited Kolkata Municipal Corporation & Anr. v. Bimal Kumar Shah & Ors. to highlight the state’s obligation to ensure timely payment of fair compensation.

Court’s Reasoning:
The Court found that JAL had already accepted liability for the 2018 award, and the Supplementary Award was merely an extension of this. Since JAL continued to own the land and it was not transferred to UltraTech, the liability to pay compensation could not be passed on to UltraTech. The court also rejected JAL’s argument for returning the land to the original owners, as the land was being used as a safety zone for the cement project.

Conclusion:
The Supreme Court allowed UltraTech’s appeal and set aside the High Court’s order. The court directed the State of Himachal Pradesh to pay the compensation of Rs. 3.05 crore to the landowners within 15 days, recoverable from JAL. The Supreme Court emphasized the importance of expeditious compensation payment in land acquisition cases.

Implications:
This ruling clarifies the allocation of liabilities in corporate arrangements concerning land acquisition and emphasizes the need for state authorities to ensure timely payment of compensation to landowners.

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