RAJIV PUJARI Vs. STATE OF ORISSA

JUDGEMENT

(1.) THESE petitions have been filed by the owners of the land acquired by the State Government in favour of the opposite party Anil Agarwal Foundation (hereinafter in short called as 'Foundation') for establishment of a University in exercise of its eminent domain power under the provisions of Part -VII of the Land Acquisition Act, 1894 (hereinafter called as the 'L.A. Act' in short). The public interest litigation petitions have been filed both on behalf of the land owners who have no access to justice and also on behalf of the public of the locality of the lands whose public interest is affected by violating Rule of Law in acquiring vast tract of both Government, Temple and private lands in favour of the Foundation. They were listed and heard together by consent of the learned Counsel for the parties and are disposed of by this common judgment. With a view to avoid repetition of pleadings and rival legal contentions urged on behalf of the parties, we would briefly state the necessary facts and advert to the pleadings and legal submissions made on behalf of the parties while answering the points that are framed in these cases.

(2.) THE facts stated in all these writ petitions are almost the same and the impugned notifications have been challenged on identical grounds. It is therefore not necessary to refer to the facts of all the writ petitions. We have therefore, referred to the facts of W.P.(c) No. 7163 of 2008 & W.P.(C) No. 10325 of 2008. Shorn of unnecessary details, the brief facts of the case are that on 23.6.2006 one Mohit Kumar Rana, Principal, A.T. Kearney Limited filed an application before the State Government stating that M/s. Vedanta Resources Limited is contemplating to set up a University in Orissa to impart education in under -graduate and post -graduate courses in Engineering, Medicine, Management, General Science and Humanities etc. It was further stated in the application that the Group had given a presentation to the Hon'ble Chief Minister, Orissa during April, 2006. Their team after visiting different sites in Orissa have selected a site on the outskirt of Puri on the Puri -Konark marine drive to be the place ideal for establishment of the University. Therefore, it was, inter alia, prayed that Government of Orissa should make available 15,000 acres of contiguous land around Nuanai, in the district of Puri in Bhubaneswar -Puri -Konark marine drive. It was further prayed that the Government of Orissa should coordinate the land acquisition process by appointment of a Special Land Acquisition Officer. The Group prayed that they require 1500 acres of land for Phase -I to be acquired by September, 2006 and the balance by December, 2006. Thereafter, a Memorandum of Understanding was signed between Government of Orissa and Vedanta Foundation on 19.7.2006 and Government of Orissa confirmed the availability of contiguous land of about 8000 acres and to make endeavour to provide an additional contiguous land and other facilities as required by the Foundation. It is the case of the petitioners that a Private Limited Company incorporated in the name and style of Sterlite Foundation changed its name to Vedanta Foundation under Section 25 of the Companies Act of 1956 and accordingly fresh certificate of incorporation consequent on change of name was issued in July, 2004. After signing of the MOU, necessary steps were taken by the State Government for allotment of the land to the Foundation and the Vice President of the Vedanta Foundation was directed to deposit 20% of the estimated investment cost which was subsequently reduced to 10% without any basis and reasoning and necessary direction was issued to the Collector, Puri to obtain administrative approval of the project from the Higher Education Department and to produce the approval along with the proposal before the Government. In the meantime the opinion of the Law Department was sought on the questions (a) whether the Foundation is an educational foundation? and (b) whether the land is required to be acquired for public purpose? The Law Department opined that Sections 4, 5 and 6 of the L.A. Act provide that the Government can acquire land for any public purpose or for a Company and such company would mean as per definition contained in the Companies Act, 1956 (hereinafter called "the Act, 1956") a company incorporated under the Companies Act, a society registered under the Societies Registration Act or a Co -operative Society. Law Department further opined that the file does not indicate that "Vedanta Foundation" is a company, or a Society under the Societies Registration Act or a Co -operative Society. With the aforesaid opinion the Law Department required the Administrative Department to find out the legal status of Vedanta Foundation and whether it comes within the purview of Sub -clause (vi) of Clause (f) of Section 3 of the L.A. Act. Thereafter the Administrative Department, i.e., the Revenue and Disaster Management Department again submitted the file to the Law Department for opinion drawing its attention to the certificate of incorporation of the Foundation under the Companies Act, the amended certificate on name and the Memorandum of Association of the Company. This time the Law Department opined that land can be acquired for a private company if such acquisition comes within the purview of Clause (a) of Sub -section (1) of Section 40 of the Land Acquisition Act which provides that acquisition of land can be done for erection of dwelling houses for workmen employed in the Company or for the provisions of amenities directly connected therewith and considering the proposal of Vedanta with reference to the aforesaid provision, it further opined that said requirement does not fall within the purview of Clause (a) of Sub -section (1) of Section 40 of the L.A. Act. Law Department further observed that land can be acquired for the proposed educational scheme under the Act if the appropriate Department of the Government sponsors a Scheme to carry out that. Alternatively land can be acquired for an educational scheme sponsored by a Society but with the prior approval of the Government. So observing, Law Department opined that under the Act, land can be acquired for public purpose provided Government sponsors to carry out an educational scheme or for a registered society with prior approval of the Government. Alternatively, it also opined that the Administrative Department may verify if acquisition of land can be made under Section 15 of the Orissa Industrial Infrastructural Development Corporation Act, 1980. After the aforesaid opinion was received, the administrative department was of the view that the second option to go through IDCO was not feasible and suggested to consider as to whether Higher Education Department will sponsor and own the project directly and whether it would be done through a Society to be framed by the Higher Education Department. After consideration of the above, it was decided to explore the alternative of the Private Company to be converted to a public company on which, the views of the Law Department was again sought. This time the Law Department opined that land can be acquired for a 'Public Company' under the Land Acquisition Act in accordance with Part VII. Thereafter the company is said to have changed its status from Private Company to Public Company with the change of name as Anil Agarwal Foundation. Thereafter the State Government issued notification under Section 4(1) of the Land Acquisition Act for acquisition of land on behalf of Anil Agarwal Foundation for setting up of Vedanta University. The case of the petitioners is that the proposal for acquisition of land was initially made by Vedanta Resources Limited whereas the MOU was signed by the Vedanta Foundation but, on and from 6th September, 2006 Vedanta Foundation no more existed and Anil Agarwal Foundation came into being. Even though no valid document was produced before the State Government with regard to conversion of the status of the company from 'private' to 'public', the State Government issued notifications under Section 4(1) of the Act treating the company as a public company proposing to acquire the lands in its favour to establish a University. On the complaint of some of the petitioners before the local M.L.A. that the company not being a public company has made such a claim, the MLA approached the Union Minister to know the exact status of the company who in turn sought the required information from the Registrar of Companies. By letter dated 7th May, 2008, Mr. D.K. Gupta, Registrar of Companies, Maharashtra intimated the Media Advisor to Minister of State for Rural Development, Government of India as under:

(3.) IT is alleged by the petitioners that Laxmi Narayan Agarwal, one of the Directors of Vedanta Foundation though expired on 2.4.2006, the resolution dated 23rd November, 2006 passed for the conversion of the company from 'private' to 'public' company, the said Laxmi Narayan Agarwal has been shown as one of the Directors of Anil Agarwal Foundation which demonstrates the mala fide intention of the company to obtain conversion so as to have eligibility for acquisition of land under the provisions of L.A. Act. The further allegation of the petitioners is that though the certificate from the competent authority with regard to change of status has not been produced, yet the State has considered the Anil Agarwal Foundation as a Public Company and proceeded to acquire lands on its behalf for establishment of Vedanta University. Referring to Clause 6 of the Memorandum of Understanding, the petitioners would submit that under the said clause complete autonomy is sought to be given to the Vedanta University in the matter of administration, admission, fee structure, curriculum and faculty which is not permissible. In view of the aforesaid clause, the State Government would not have any control over the functioning of the university which may at its discretion charge such fees etc. which the students of State of Orissa can never afford. It is the further case of the petitioners that Clause 6(ix) of the MOU requires that people residing within 5 K.M. radius from the University boundary shall lose their fundamental rights relating to development of their residential houses. They shall have to obtain permission from the Company for the purpose of any development of their residential houses. The allegation of the petitioners is that the University in question has neither been sponsored by any Ors. University of our State nor has it been formed under any scheme of the Universities Act. Though the State Government had earlier signed MOU with Vedanta Foundation, again it has signed an agreement with Anil Agarwal Foundation on 31.7.2007. Referring to the quantum of land and area of the various reputed universities in the country like Utkal University, Jawaharlal Nehru University, II Ts and abroad, the petitioners contend that the requirement of land put forward by the Company in question is very much excessive. It is the case of the petitioners that the real purpose of requiring such vast extent of property cannot be said to be only for the purpose of the University; the real purpose sought to be achieved has been masked. There is some hidden agenda for the beneficiary company. Land acquisition being an ex proprietary legislation, the requirement of transparency is a paramount consideration mandated by the Statute. It is the case of the petitioners that 80% of the lands sought to be acquired is agricultural land and the owners of the land and their family members depend on the said land for their livelihood. It is contended that the Company is not at all a public company. So the declaration made by the company as well as the authorities is nothing but a colourable exercise of power with the mala fide intention to grab the agricultural properties of the land owner petitioners and Ors. land owners. It is further contended that as per Section 3(f)(vi) of the L.A. Act land acquired for educational purposes which is a public purpose is to be sponsored by the Government or by any authority established by the Government; or with the prior approval of the appropriate Government or by the local authority; or by a society registered under the Societies Registration Act or any Ors. corresponding law for the time being in force in a State or a co -operative society within the meaning of any law relating to co -operative societies for the time being in force in any State. Anil Agarwal Foundation which is a company registered under the Companies Act does not fall under any of the categories of the authorities for whom a valid land acquisition process can be launched to acquire land for serving the aforesaid public purpose. Therefore, the acquisition of land for M/s. Anil Agarwal Foundation for setting up an educational institution directly falls foul of the aforesaid legal stipulations in Section 3(f)(vi) of the Act. Public purpose has been defined in Section 3(f) of the Act which says that 'public purpose' does not include acquisition of land for companies. The further contention of the petitioners is that the present acquisition of vast tract of lands has been done by the State Government under the provisions in Chapter VII of the L.A. Act which deals with acquisition of land for the Companies. The Land Acquisition Act being an ex -proprietary legislation, the provisions of Chapter VII read with Land Acquisition (Companies) Rules, 1963 is to be strictly complied with by the State Government. Section 39 of the L.A. Act provides for previous consent of appropriate Government and execution of agreement by the beneficiary Company in favour of the State Government. Section 40 of the L.A. Act mandates that such consent shall not be given unless the appropriate Government be satisfied either on the report of the Collector under Section 5A, Sub -section (2) or by an enquiry held as provided therein. Rule 4 of the Land Acquisition (Companies) Rules, 1963 mandates the procedure of enquiry. It is the case of the petitioners that admittedly no such enquiry has been conducted by the Collector under Rule 4(1) of the Land Acquisition (Companies) Rules, 1963 in absence of which issuance of notification under Sections 4 and 6 of the L.A. Act is bad in law. It is contended by the petitioners that from the information furnished by the State Government under the Right to Information Act it appears that no such enquiry has been conducted under Rule 4 of the Land Acquisition (Companies) Rules, 1963 prior to issuance of the notification. Hence the notifications are liable to be struck down for non -compliance of the mandatory provisions of Chapter VII of the L.A. Act and Rules.