A. As laid down by this Court in Jilubhai Nanbhai Khachar and
others v. State of Gujarat and another4
, the right of user is a property
right which can be acquired. Further, it is not necessary that the
acquisition should be of “whole” of property rights or ownership rights.
The acquisition could be “partial” and the principles land down in the
PMP Act are designed to give fair and just compensation for acquisition
of such right of user.
As laid down by this Court in Jilubhai Nanbhai Khachar and others
(Supra), the term property in legal sense means an aggregate of rights which
are guaranteed and protected by law and would extend to entirety or group of
rights inhering in a person. It was observed by this Court as under:
“42. Property in legal sense means an aggregate of rights
which are guaranteed and protected by law. It extends to every
species of valuable right and interest, more particularly,
ownership and exclusive right to a thing, the right to dispose of
the thing in every legal way, to possess it, to use it, and to
exclude everyone else from interfering with it. The dominion or
indefinite right of use or disposition which one may lawfully
exercise over particular things or subjects is called property. The
exclusive right of possessing, enjoying, and disposing of a thing
is property in legal parameters. Therefore, the word ‘property’
connotes everything which is subject of ownership, corporeal or
incorporeal, tangible or intangible, visible or invisible, real or
personal; everything that has an exchangeable value or which
goes to make up wealth or estate or status. Property, therefore,
within the constitutional protection, denotes group of rights
inhering citizen’s relation to physical thing, as right to possess,
use and dispose of it in accordance with law. In Ramanatha
Aiyar’s The Law Lexicon, Reprint Edn., 1987, at p.1031, it is
stated that the property is the most comprehensive of all terms
which can be used, inasmuch as it is indicative and descriptive of
every possible interest which the party can have. The term
property has a most extensive signification, and, according to its
legal definition, consists in free use, enjoyment, and disposition
by a person of all his acquisitions, without any control or
diminution, save only by the laws of the land.”
19. We therefore proceed on the premise that the right of user sought to be
taken over under the provisions of the PMP Act amounts to acquisition of one
of the facets of property rights which inher in the owner/occupier. For the
acquisition of such right of user, the compensation is prescribed in terms of
Section 10 of the PMP Act. There are two elements of compensation under
Section 10. The first part deals with any damage, loss or injury sustained by
any owner/occupier as a result of exercise of powers conferred by Sections
4,7 and 8 of the PMP Act that is to say the actual damage, loss or injury
sustained because of entry upon and/or digging or marking levels and survey
of land under Section 4 or while actual laying of the pipeline including
digging of trenches and carrying of requisite material for such operations
under Section 7 or at any stage of maintenance, examinations, repairing and
altering or removing of pipeline in terms of Section 8 of the PMP Act. The
measure for determining such compensation is given with sufficient clarity in
sub-section (3) of Section (10). The idea is to compensate the owner/occupier
for actual damage, loss or injury sustained by him as a result of the operations
carried out in terms of Section 4, Section 7 or Section 8 of the Act. One of
the indicia under sub-Section 3 could be “any injury to any other property
whether movable or immovable, or the earnings of such persons in any other
manner”. All possible acts as a result of which the damage, loss or injury
could be so occasioned are taken care of and stipulated in said sub-section.
Over and above such compensation for actual damage, loss or injury,
additional compensation @ 10% of the market value of the land is given to
the owner/occupier under sub-section 4 of Section 10 for taking over the right
of user to lay the pipelines. This element of additional compensation is
independent of any actual loss or damage and is purely linked to the value of
the land for the purposes of computation. This element of compensation is
purely for acquisition of right of user simplicitor.
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10019 OF 2016
(Arising out of SLP(C) No.2725 of 2010)
Laljibhai Kadvabhai Savaliya & Ors.
V
State of Gujarat & Ors.
Citation:(2016) 9 SCC791
Dated:October 05, 2016
1. Leave granted. These appeals take exception to the common judgment and
order dated 13.07.2009 passed by the High Court of Gujarat at Ahmedabad in
Special Civil Application Nos.5107 of 2008, 4321 of 2008, 824-853 of 2008
and 899-916 of 2008. Since all these appeals raise identical issues, they are
dealt with and disposed of by this common judgment.
2. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land)
Act, 1962 (herein referred to as the “PMP Act”) was enacted by Parliament to
provide for the acquisition of right of user in land for laying pipelines for the
transport of petroleum and minerals and for incidental matters, with following
Statement of Objects and Reasons :-
“As a result of the implementation of plans for the
development of petroleum resources in the country, it is
anticipated that in the next few years there will be a substantial
increase in the production of crude oil, natural gas and petroleum
products by the public sector oilfields and refineries in India. It
has therefore become necessary to lay petroleum pipelines in the
country to serve as an efficient and cheap means of transportation
and distribution of petroleum and petroleum products.
2. Although land can be acquired outright for laying such
pipelines under the Land Acquisition Act, 1894 the procedure for
such acquisition is long-drawn and costly. Since the petroleum
will be laid underground outright acquisition of land is not
necessary. Therefore, in the case of these pipelines it is
considered sufficient to acquire the mere right of user in the land
for laying and maintaining the pipelines. The Bill seeks to
achieve the above purpose.
3. The main features of the Bill are–
(i). No right of user of land can be acquired for the purpose of
laying pipelines unless the Central Government declares its
intention by Notification in the Official Gazette, and unless
objections, if any, filed within twenty-one days of that
Notification are disposed of by the competent authority.
(ii). When final declaration about acquisition is made the right
to use land for the purpose of laying pipelines will vest in thePage 3
3
Central Government, State Government or the corporation, as the
case may be but notwithstanding such acquisition, the owner or
occupier of the land shall be entitled to use the land for the
purpose for which such land was put to use immediately before
the declaration by the Central Government. But after the date of
acquisition he shall not construct any building or any other
structure or construct or excavate any tank, well, reservoir or dam
or plant any tree, on that land.
iii). Compensation for the damage, loss or injury sustained by
any person interested in the land shall be payable to such person.
Besides this, compensation calculated at ten per cent of the
market value of the land on the date of the preliminary
Notification is also payable to the owner and to any other person
whose right of enjoyment in the land has been affected by reason
of the acquisition. The compensation in both cases is to be
determined by the competent authority in the first instance and an
appeal lies from its decision to the District Judge.”
3. Section 2 of the PMP Act defines certain expressions. In terms of Section 3,
the Central Government is empowered to acquire the right of user in any land.
Under Section 4, it is lawful for any authorized person to enter upon and
cause survey in respect of such land. Under Section 5, any person interested
in the land can object to the laying of the pipelines under the land. The
objections so preferred are to be dealt with by the Competent Authority who
would then make a report for the decision of the Central Government. Under
Section 6 if the Central Government is satisfied that the land is required for
laying any pipeline for transport of petroleum or any mineral, it may declare
so by Notification in the Official Gazette, whereafter the right of user shall
vest absolutely in the Central Government or in the State Government or thePage 4
4
Corporation as directed. After the right of user stands so vested it is lawful to
lay pipelines in terms of Section 7. Section 9 incorporates certain restrictions
regarding the use of such land and Section 10 lays down principles for award
of compensation in respect of acquisition of the right of user of any land and
also in respect of any damage or loss sustained by any person interested in the
land. The relevant Sections namely Sections 2, 3, 6, 7, 9 ,10 and 18 of the
PMP Act are as under:-
“2. Definitions. – In this Act, unless the context otherwise
requires–
(a) "competent authority" means any person or authority
authorised by the Central Government, by Notification in the
Official Gazette, to perform the functions of the competent
authority under this Act 1 and different persons or authorities may
be authorised to perform all or any of the functions of the
competent authority under this Act in the same area or different
areas specified in the Notification;
(b) "corporation" means anybody corporate established under any
Central, Provincial or State Act, and includes—
(i) a company formed and registered under the Companies
Act, 1956; and
(ii) a company formed and registered under any law
relating to companies formerly in force in any part of India;
(ba) "minerals" have the meanings assigned to them in the Mines
Act, 1952 (35 of 1952), and include mineral oils and stowing
sand but do not include petroleum;
(c) "petroleum" has the same meaning as in the Petroleum Act,
1934 (30 of 1934), and includes natural gas and refinery gas;
(d) "prescribed" means prescribed by rules made under this Act.Page 5
5
3. Publication of Notification for acquisition.– (1) Whenever it
appears to the Central Government that it is necessary in the public
interest that for the transport of petroleum 2 or any mineral] from
one locality to another locality pipelines may be laid by that
Government or by any State Government or a corporation and that
for the purpose of laying such pipelines it is necessary to acquire
the right of user in any land under which such pipelines may be
laid, it may, by Notification in the Official Gazette, declare its
intention to acquire the right of user therein.
(2) Every Notification under sub-section (1) shall give a brief
description of the land.
3) The competent authority shall cause the substance of the
Notification to be published at such places and in such manner as
may be prescribed.
6. Declaration of acquisition of right of user.– (1) Where no
objections under subsection (1) of section 5 have been made
to the competent authority within the period specified therein
or where the competent authority has disallowed the
objections under sub-section (2) of that section, that authority
shall, as soon as may be, 1 either make a report in respect of
the land described in the Notification under sub-section (1) of
section 3, or make different reports in respect of different
parcels of such land, to the Central Government containing
his recommendations on the objections, together with the
record of the proceedings held by him, for the decision of that
Government and upon receipt of such report the Central
Government shall if satisfied that such land is required for
laying any pipeline for the transport of petroleum or any
mineral, declare, by Notification in the Official Gazette, that
the right of user in the land for laying the pipelines should be
acquired and different declarations may be made from time to
time in respect of different parcels of the land described in the
Notification issued under sub-section (1) of section 3,
irrespective of whether one report or different reports have
been made by the competent authority under this section.
(2) On the publication of the declaration under sub-section (1),
the right of user in the land specified therein shall vest absolutely
in the Central Government free from all encumbrances. Page 6
6
(3) Where in respect of any land, a Notification has been issued
under sub-section (1) of section 3 but 3no declaration in respect
of any parcel of land covered by that Notification has been
published under this section within a period of one year from the
date of that Notification, that Notification shall cease to have
effect on the expiration of that period.
(3A) No declaration in respect of any land covered by a
Notification issued under subsection (1) of section 3, published
after the commencement of the Petroleum Pipelines (Acquisition
of Right of User in Land) Amendment Act, 1977 (13 of 1977),
shall be made after the expiry of three years from the date of
such publication.
(4) Notwithstanding anything contained in sub-section (2), the
Central Government may, on such terms and conditions as it may
think fit to impose, direct by order in writing, that the right of
user in the land for laying the pipelines shall, instead of vesting
in the Central Government vest, either on the date of publication
of the declaration or, on such other date as may be specified in
the direction, in the State Government or the corporation
proposing to lay the pipelines and thereupon the right of such
user in the land shall, subject to the terms and conditions so
imposed, vest in that State Government or corporation, as the
case may be, free from all encumbrances.
7. Central Government or State Government or
corporation to lay pipelines.– (1) Where the right of user in any
land has vested in the Central Government or in any State
Government or Corporation under section 6–
(i) it shall be lawful for any person authorised by the Central
Government or such State Government or corporation, as the
case may be, and his servants and workmen to enter upon the
land and lay pipelines or to do any other act necessary for the
laying of pipelines:
Provided that no pipeline shall be laid under– Page 7
7
(a) any land which, immediately before the date of the
Notification under sub-section (1) of section 3, was used for
residential purposes;
(b) any land on which there stands any permanent structure
which was in existence immediately before the said date;
(c) any land which is appurtenant to a dwelling house; or
(d) any land at a depth which is less than one metre from the
surface;
(ia) for laying pipelines for the transport of petroleum, it shall be
lawful for any person authorised by the Central Government or
such State Government or corporation to use such land for laying
pipelines for transporting any mineral and where the right of user
in any land has so vested for laying pipelines for transporting any
mineral, it shall be lawful for such person to use such land for
laying pipelines for transporting petroleum or any other mineral;
and
(ii) such land shall be used only for laying the pipelines and for
maintaining, examining, repairing, altering or removing any such
pipelines or for doing any other act necessary for any of the
aforesaid purposes or for the utilisation of such pipelines.
(2) If any dispute arises with regard to any matter referred to in
paragraph (b) or paragraph (c) of the proviso to clause (i) of subsection
(1), the dispute shall be referred to the competent
authority whose decision thereon shall be final.
9. Restrictions regarding the use of land.– (1) The owner
or occupier of the land with respect to which a declaration has
been made under sub-section (1) of section 6 shall be entitled to
use the land for the purpose for which such land was put to use
immediately before the date of the Notification under sub-section
(1) of section 3:
Provided that, such owner or occupier shall not after the
declaration under sub-section (1) of section 6 –
(i) construct any building or any other structure; Page 8
8
(ii) construct or excavate any tank, well, reservoir or dam; or
(iii) plant any tree, on that land.
(2) The owner or occupier of the land under which any pipeline
has been laid not do any act or permit any act to be done which
will or is likely to cause any damage in any manner whatsoever
to the pipeline.
(3) Where the owner or occupier of the land with respect to
which a declaration has been made under sub-section (1) of
section 6-
(a) constructs any building or any other structure, or
(b) constructs or excavates any well, tank, reservoir or dam, or
(c) plants any tree,
on that land, the Court of the District Judge within the local
limits of whose jurisdiction such land is situate may, on an
application made to it by the competent authority and after
holding such inquiry as it may deem fit, cause the building,
structure, reservoir, dam or tree to be removed or the well or tank
to be filled up, and the costs of such removal or filling up shall
be recoverable from such owner or occupier in the same manner
as if the order for the recovery of such costs were a decree made
by that Court.
10. Compensation.– (1) Where in the exercise of the powers
conferred by section 4, section 7 or section 8 by any person, any
damage, loss or injury is sustained by any person interested in
the land under which the pipeline is proposed to be, or is being,
or has been laid, the Central Government, the State Government
or the corporation, as the case may be, shall be liable to pay
compensation to such person for such damage, loss or injury, the
amount of which shall be determined by the competent authority
in the first instance.
(2) If the amount of compensation determined by the competent
authority under subsection (1) is not acceptable to either of the
parties, the amount of compensation shall, on application byPage 9
9
either of the parties to the District Judge within the limits of
whose jurisdiction the land or any part thereof is situated, be
determined by that District Judge.
(3) The competent authority or the District Judge while
determining the compensation under sub-section (1) or
sub-section (2), as the case may be, shall have due regard to the
damage or loss sustained by any person interested in the land by
reason of—
(i) the removal of trees or standing crops, if any, on the land
while exercising the powers under section 4, section 7 or section
8;
(ii) the temporary severance of the land under which the pipeline
has been laid from other lands belonging to, or in the occupation
of, such person; or
(iii) any injury to any other property, whether movable or
immovable, or the earnings of such persons caused in any other
manner:
Provided that in determining the compensation no account shall
be taken of any structure or other improvement made in the land
after the date of the Notification under sub-section (1) of section
3.
(4) Where the right of user of any land has vested in the Central
Government, the State Government or the corporation, the
Central Government, the State Government or the corporation, as
the case may be, shall, in addition to the compensation, if any,
payable under subsection (1), be liable to pay to the owner and to
any other person whose right of enjoyment in that land has been
affected in any manner whatsoever by reason of such vesting,
compensation calculated at ten per cent. of the market value of
that land on the date of the Notification under sub-section (1) of
section 3.
(5) The market value of the land on the said date shall be
determined by the competent authority and if the value so
determined by that authority is not acceptable to either of the
parties, it shall, on application by either of the parties to thePage 10
10
District Judge referred to in subsection (2), be determined by that
District Judge.
(6) The decision of the District Judge under sub-section (2) or
sub-section (5) shall be final.
18. Application of other laws not barred. – The provisions
of this Act shall be in addition to and not in derogation of any
other law for the time being in force relating to acquisition of
land.
4. In exercise of the powers conferred by Section 3 of the PMP Act, the Central
Government by Notification published on 07.01.2006 in the Gazette of India
declared its intention to acquire the right of user in respect of certain lands.
Said Notification was as under:-
“Whereas it appears to the Central Government that it is
necessary in the public interest that for the transportation of
natural gas through an interconnection between
Jamnagar-Bhopal and Kakinada-Hyderabad-Goa pipeline a
pipeline should be laid by Gas Transportation and Infrastructure
Company Ltd1
.
And whereas it appears to the Central Government that for
the purpose of laying the said pipeline, it is necessary to acquire
the right of user in land under which the said pipeline is proposed
to be laid and which is described in the Schedule annexed to this
Notification.
Now, therefore, in exerciser of the powers conferred by
sub-section (1) of Section 3 of the Petroleum and Minerals
Pipelines (Acquisition of Right of User in Land) Act, 1962 (50 of
1962), the Central Government hereby declares its intention to
acquire the right of user therein.
1
The name has since then been changed to Reliance Gas Transportation Infrastructure Ltd.Page 11
11
Any person interested in the land described in the said
Schedule may, within twenty one days from the date on which
the copies of this Notification as published in the Gazette of
India under sub-section (1) of Section 3 of the said Act, are made
available to the general public, object in writing to the
acquisition of the right of user therein for laying of the pipeline
under the land to Shri A.K. Sanghavi, Competent Authority, Gas
Transportation and Infrastructure Company Limited Pipeline
Project, Anand Mahal Apartment, Opposite to Bhulka Bhavan
School, Anand Mahal Road, Surat-395009, Gujarat.”
The Notification set out details of survey numbers of lands from
different villages and the extent of land in respect of which right of user was
sought to be acquired.
5. In these matters we are concerned with Block Nos.331, 342 and 364 of
Village Gothan, District Surat which were mentioned in the aforesaid
Notification published on 07.01.2006. In so far as Block No.331 is concerned,
non-agricultural permission was granted on 03.03.1982. However, since there
was no construction within the stipulated time, this non-agricultural
permission is said to have lapsed by efflux of time. In any case the land had
always been shown as agricultural land in Revenue Records. The appellant
Nos.1 to 3 in appeal arising from SLP(Civil) Nos.2228-2257 of 2010 are
stated to have purchased land admeasuring 29,370 sq.mtrs. and 8,531 sq.mtrs.
from Block No.331 and thereafter sold sub-plots to about 70 persons
including appellant Nos.4 to 29 in that appeal. The appellant No.1 in appeal
arising out from SLP(Civil) Nos.2260-2277 of 2010 along with his brother is
said to have purchased land admeasuring 50,691 sq.mtrs. from Block Nos.
342 and 364 and sold individual plots from that land to 68 persons including
appellant Nos.2 to 18 in said appeal.
6. On 07.03.2006, One Mr. V.I. Gohil, retired Deputy Collector was appointed as
Competent Authority vide Notification dated 7.03.2006 issued by the Central
Government which was published on 11.03.2006 in the Official Gazette.
Thereafter all the recorded owners were sought to be served with notices
inviting them to prefer objections to the proposed acquisition of right of user.
Some of the land-owners filed their objections in respect of proposed
acquisition. The Competent Authority had fixed the hearing on 2.08.2007.
After considering the objections and hearing those who were present
including appellant No.1 Laljibhai, the Competent Authority forwarded its
Report dated 7.08.2007 to the Central Government. The report indicates that
the Competent Authority had held meetings with the owners/occupiers as well
as the representatives of RGTIL. The report further shows that the average
rate at which the lands in village Gothan were sold during the years
2002-2005 was Rs.13.40 per sq.mtr. The compensation determined by
consent was Rs.181/- per sq.mtr. including damages under Section 10(1) for
lands other than those falling in industrial zone. For those lands falling in
industrial zone, the compensation was increased to the level of Rs.201/- per
sq.mtr. by consent. Ninety percent of this compensation was paid in advance.
Thereafter, spot verification was undertaken and photographs were taken
which show that there was no construction on the lands in question. In the
meantime, by order dated 29.03.2007 District Panchayat Office, Revenue
Branch, Surat had accorded permission for conversion of certain lands
including Block Nos.342 and 364 of village Gothan to non-agricultural use
for the industrial purposes. The order shows that the steps to seek such
permission were taken and the recommendations in that behalf were made
after the publication of the aforesaid Notification on 7.01.2006.
7. After considering the report of the Competent Authority, by Notification
dated 17.11.2007 issued in exercise of the powers conferred by Section 6 of
the PMP Act, the Government of India directed that the right of user in
respect of land mentioned in said Notification dated 17.11.2007 shall stand
vested in M/s Reliance Gas Transportation Infrastructure Ltd. (“RGTIL” for
short) free from all encumbrances. The Notification reads as under:-
“S.O. Whereas by Notification of the Government of India
in the Ministry of Petroleum and Natural Gas Number S.O. 41
dated 06th January, 2006, issued under the sub-section (1) of
Section 3 of the Petroleum and Minerals Pipelines (Acquisition
of Right of User in Land) Act, 1962 (50 of 1962) (hereinafter
referred to as the said Act), the Central Government declared its
intention to acquire the right of user in the land, specified in the
Schedule appended to that Notification for the purpose of laying
Kakinada-Hyderabad-Uran-Ahmedabad gas pipeline for
transportation of natural gas by M/s Reliance Gas Transportation
Infrastructure Limited to various Consumers of District Surat in
the State of Gujarat
And, whereas copies of the said Gazette Notification were,
made available to the public on or before 08th September, 2007;
And whereas, the objections received from the public to
the laying of the pipeline have been considered and disallowed
by the Competent Authority;
And whereas the competent authority has, under
sub-section (1) of Section 6 of the said Act, submitted reports to
the Government of India;
And whereas the Central Government, after considering
the said report and on being satisfied that the said land is
required for laying the pipeline, has decided to acquire the right
of user therein;
Now, therefore, in exercise of the powers conferred by
sub-section (1) of Section 6 of the said Act, the Central
Government hereby declares that the right of user in the land
specified in the Schedule appended to this Notification is hereby
acquired for laying the pipeline;
And, further, in exercise of the powers conferred by
sub-section (4) of Section 6 of the said Act, the Central
Government hereby directs that the right of user in the said land
for laying the pipeline shall, instead of vesting in the Central
Government, vest, on the date of the publication of the
declaration, in M/s Reliance Gas Transportation Infrastructure
Limited free from all encumbrances.”
The Schedule appended to the Notification included Block Nos.331,
342 and 364 of village Gothan and the extent of land in respect of which right
to user was acquired from these Blocks was mentioned as 2295 sq.mtrs., 5047
sq. mtrs. and 3424 sq. mtrs respectively.
8. In the physical verification of Block Nos.342 and 364 carried out in January,
2008, it was seen that some of the owners had commenced construction
activities. A communication was therefore addressed by the Competent
Authority on 08.01.2008 to the District Development Officer, Surat annexing
Notifications issued under Sections 3 and 6 of the PMP Act. Around this time
the owners/occupiers of Block Nos.331, 342 and 364 filed Special Civil
Application Nos.824-898 of 2008 and Nos.899-966 of 2008 before the High
Court of Gujarat seeking declaration that RGTIL had no authority to enter the
lands of said owners/occupiers and that it be accordingly restrained. Notices
were issued in the aforesaid Special Civil Applications on 04.02.2008 and
according to the respondents therein, it was only then it came to their
knowledge that non-agricultural permissions were granted on 03.03.1982 in
respect of Block No.331 and on 29.03.2007 in respect of Block Nos.342 and
364. RGTIL challenged these non-agricultural permissions by filing Special
Civil Application Nos.2252 of 2008 and 3380 of 2008. The High Court by its
interim orders dated 06.02.2008 in Special Civil Application No.2252 of 2008
and 21.02.2008 in Special Civil Application No.3380 of 2008 stayed the
operation of non-agricultural permissions in respect of aforesaid Block
Nos.342, 364 and 331. These interim orders as well as the orders refusing
interim relief in Special Civil Application Nos.8992 and 996 of 2008
preferred by the owners/occupiers themselves, were challenged by filing
Letters Patent Appeals. In those appeals, the Division Bench of the High
Court permitted RGTIL who had by then started laying the pipelines to cover
the ditches and to produce the memorandum to that effect in Special Civil
Application Nos.899-966 of 2008 and in 2252 of 2008.
9. The owners/occupiers of Block Nos.342 and 364 also preferred Special Civil
Application No.5107 of 2008 on or about 24.03.2008 challenging the
Notification issued by the Central Government under Section 6 of the PMP
Act. This Special Civil Application No.5107 of 2008 was heard along with
other Special Civil Applications referred to herein above and the High Court
by its order dated 11.07.2008 held that the balance of convenience was in
favour of RGTIL and as such the prayers for interim relief by the
owners/occupiers were rejected. The High Court recorded the statement of the
Counsel who appeared for RGTIL that it would deposit with the Competent
Authority provisional compensation @ Rs.300/- per sq.mtr. for the lands
including constructions thereon. Accordingly provisional compensation at the
aforesaid rate was deposited by RGTIL with the Competent Authority.
10. Thereafter, number of petitioners namely 70 from Special Civil Application
No.5107 of 2008, 150 from Special Civil Application No.4321 of 2008, 75
from Special Civil Application Nos.824-853 of 2008 and 68 from Special
Civil Application Nos.899-916 of 2008 withdrew their challenge, leaving the
remaining petitioners to contest the matter. The Division Bench of the High
Court by its judgment and order dated 13.07.2009, which is presently under
appeal, disposed of aforesaid Special Civil Application Nos.824-853,Page 17
17
899-966, 5107 and 4321 of 2008 filed by the owners/occupiers and Special
Civil Application Nos.2252 and 3380 of 2008 filed by RGTIL with following
observations:-
“Learned counsel for the landowners fairly submitted that
none of the petitioners have challenged the validity of Section
3(1) Notification. No grievance is also raised before us in these
proceedings against the order passed by the competent authority
under sub-section (2) to Section 5 of the Act……….
We find that the pipelines have already been laid over the
properties of the petitioners. Petitioners had not challenged at
any point of time the Notification issued under Section 3(1) of
the Act. Majority of the petitioners have withdrawn from the
writ petitions as a whole. So far as remaining petitioners are
concerned, it seems that their grievance is only about inadequacy
of compensation. Section 10 of the Act specifically says that if
any party has any grievance with regard to any damage, loss,
injury or inadequacy of compensation, they can always approach
the District Judge within the limits of whose jurisdiction the land
is situated. Since effective remedy is provided under the Act, this
Court under writ jurisdiction is not justified in expressing any
opinion regarding various contentions raised by the petitioners,
especially when Section 3(1) Notifications has not been
challenged and also due to the fact that pipelines have already
been laid down.
Under the circumstances, all these matters are disposed of
with a direction that if the petitioners are aggrieved they can
approach the concerned District Judge claiming compensation
and obtain appropriate orders in accordance with law.”
11. These appeals at the instance of the owners/occupiers challenge the
correctness of the decision of the High Court. RGTIL however accepted the
judgment and did not prefer any challenge. It may be mentioned that the very
same owners/occupiers had also filed Writ Petition No.569 of 2009 in thisPage 18
18
Court challenging the vires of some of the provisions of the PMP Act.
However at the request of the petitioners, said Writ Petition No.569 of 2009
was allowed to be withdrawn on 07.01.2010. While the aforesaid matters
were pending, in another batch of matters the question of bias of the
Competent Authority was put in issue. Those matters were allowed by this
Court by its decision reported in Trilok Sudhirbhai Pandya v. Union of
India and others.2
This Court directed Union of India to appoint another
person as Competent Authority for determination of compensation but made it
clear that the judgment therein would not affect any orders with regard to
acquisition of right of user.
12. On or about 05.11.2011, an application was filed on behalf of the
appellants herein praying that appropriate directions be issued to the
Competent Authority to decide the compensation payable to the
owners/occupiers under Section 9 as well as under Section 10 at the time of
taking actual possession. Thereafter, another application namely I.A. No.5 of
2013 was filed seeking permission to raise additional grounds. By raising
these grounds, the appellants submitted that PMP Act and the rules framed
thereunder were violative of the constitutional framework. This Court by its
order dated 10.02.2014 issued notices to State of Gujarat as well as to the
2
(2011) 10 SCC 203
learned Solicitor General of India in aforesaid I.A. No.5 of 2013 and by
subsequent order dated 02.02.2016, said application was allowed. Union of
India and other respondents were permitted to file their affidavits in reply and
it was clarified that it would be permissible for any other interested person(s)
to join these proceedings. Further, by order dated 18.03.2016, this Court
stayed further proceedings before the Competent Authority.
13. Before we deal with the challenge raised in these appeals, it must be
noted that none of the landowners had challenged the validity of Section 3(1)
Notification issued in the instant case nor any grievance was raised against
the order passed by the Competent Authority under Section 5(2) of the PMP
Act. Though a substantive Writ Petition challenging the vires of some of the
provisions of the PMP Act was filed, that petition was also withdrawn,
without seeking any liberty. Even then, we have heard the submissions
regarding validity of the PMP Act. We have heard Mr. Amar Dave, learned
Advocate in support of the appeals, Mr. Ranjit Kumar, learned Solicitor
General of India, Dr. A.M. Singhvi and Mr. Paras Kuhad, learned Senior
Advocates for RGTIL, Mr. Harin Rawal learned Senior Advocate for the
Competent Authority, Mr. Preetesh Kapoor, learned Advocate for State of
Gujarat and Mr. K.K. Venugopal, learned Senior Advocate for the intervener
namely Gujarat State Petronet Ltd.Page 20
20
14. On behalf of the appellants, it was submitted:-
A. Though under the PMP Act right of user simplicitor in respect of
notified lands is acquired, for all practical purposes the
owners/occupiers stand deprived of their proprietary interest and
enjoyment of the lands in toto. According to Section 9 the user of the
land stands frozen for all times to come and the owners/occupiers
would not be allowed to use or utilize the land for any construction.
The acquisition of right of user thus amounts to complete deprivation.
B. The PMP Act is a legislation to bypass the due process of law
contemplated under the Land Acquisition Act, 1894. The entire exercise
contemplated under the PMP Act is nothing but acquisition of the entire
interest of the owners/occupiers in respect of such land. Reliance was
placed on the decision of this Court in H.D. Vora v. State of
Maharashtra and others.3
C. The PMP Act was enacted in 1962 when the activities like
production of crude oil, natural gas and petroleum products as well as
transportation and distribution of petroleum and petroleum products
were exclusively in public sector. The then Industrial Policy was relied
upon in support of this submission. Additionally, reliance was also
3
1984 SCR (2) 693/(1984) 2 SCC 337
placed on the Statement of Objects and Reasons to submit that certain
expressions like “Corporation” appearing in Section 2(b) ought to be
construed to confine to Corporations in public sector and the PMP Act
ought not to be invoked in favour of a company in private sector.
D. Certain provisions of the PMP Act were highlighted to show that
there was complete absence of requisite framework leading to unfair
treatment to the land owners.
1. The Competent Authority is to discharge important
functions like hearing of objections, making a report to the
Central Government and deciding the quantum of compensation
in the first instance. However unlike other pari materia
enactments no qualifications are prescribed for appointment of a
person as Competent Authority.
2. Upon publication of the declarations under Section 6(1),
the right of user in the lands stands vested free from all
encumbrances. The statutory scheme shows that after such
vesting, the compensation for the loss or injury suffered under
Sections 4, 7 and 8 and compensation under Section 10 is to be
determined. Neither the Act nor the Rules contemplate any
period within which compensation for such damage, loss orPage 22
22
injury and compensation for acquisition of right of user is to be
deposited or paid.
3. There are no guidelines in the PMP Act that the pipelines
should be laid in such a way so as to cause least amount of
damage or loss to the occupiers.
15. In reply, it was submitted by the learned Solicitor General and all other
Counsel:-
A. As laid down by this Court in Jilubhai Nanbhai Khachar and
others v. State of Gujarat and another4
, the right of user is a property
right which can be acquired. Further, it is not necessary that the
acquisition should be of “whole” of property rights or ownership rights.
The acquisition could be “partial” and the principles land down in the
PMP Act are designed to give fair and just compensation for acquisition
of such right of user.
B. Proviso to Section 7(1) of the PMP Act mandates that no pipeline
shall be laid under any land which was used for residential purposes, or
any land wherein any permanent structure was in existence before the
date on which Notification under Section 3(1) was issued or any land
which is appurtenant to a dwelling house. The pipeline would be laid
4
(1995) Suppl 1 SCC 596Page 23
23
under lands which are primarily fallow lands or those used for
agricultural purposes. After the pipeline is so laid, the land could
certainly be used for the purpose for which it was used before such
Notification was issued. The agricultural operations could still be
continued and the ownership in respect of land is left untouched. The
vesting provisions of the PMP Act make it clear that it is an Act relating
to acquisition of a limited right namely the right of passage under the
sub-soil to enable the laying of pipelines. It would be incorrect to term
the PMP Act to be acquiring proprietary interest of the land owners in
the land or taking over their right to possess the lands in question.
C. Relying on enactments such as the National Highways Act,
1956, the Railways Act, 1989, the Delhi Metro Railway (Construction
of Works) Act, 1978, the Indian Telegraph Act, 1885 it was submitted
that for sub-serving the societal needs, right of user simplicitor is
required to be acquired rather than acquiring the entirety of interest in
the land itself.
D. The definition of “Corporation” is wide enough to include
Companies in Private Sector. With the expanding frontiers where the
private sector is allowed entry in production and manufacture of
petroleum, petroleum products and natural gas as well as transportation
thereof, the definition of “Corporation” need not to be given anyPage 24
24
restricted meaning. Going by the Expression of Interest invited from
interested parties for usage of the pipelines in the present case, the
pipeline was required to have such design capacity so as to offer on
common carrier basis. Thus the pipeline itself would be sub-serving
public interest. The length of the pipeline in question from Kakinada of
Gujarat is over 1470 kilometers and if the lands are to be acquired
under Land Acquisition Act at every stage, it would lead to enormous
escalation in costs to the detriment of public interest.
E. The PMP Act and the Rules provide sufficient guidelines relating
to computation of compensation and deposit thereof. Section 10(1) of
the PMP Act provides for compensation for diminution in market value
as well and thus adequately protects the interest of the land owners. In
any case, ninety percent of the compensation assessed to be payable to
land owners in the present case was already deposited. Meetings were
held with the land owners and the representatives of RGTIL and the
amount of compensation was arrived at. As against the prevailing rates
of Rs.13.40 per sq.mtr., the compensation was given at the rate of
Rs.181/- per sq.mtr. for lands falling in zones other than industrial zone
and the compensation was given at the rate of Rs.201/- per sq.mtr. in
respect of lands falling in industrial zone.Page 25
25
16. Under the provisions of the PMP Act, what is taken over or acquired is
the right of user to lay and maintain pipelines in the sub-soil of the land in
question. The provisions of the PMP Act get attracted upon the requisite
Notification having been made under Section 3. If it appears to the Central
Government that it is necessary in the public interest that for the transport of
petroleum or any minerals any pipeline be made and for the purposes of
laying such pipelines it is necessary to acquire the right of user in any land, it
may by Notification issued in exercise of power under Section 3 declare its
intention to acquire such right of user. The Act then provides for making of
objections by those interested in land, which objections are thereafter to be
dealt with by the Competent Authority. The report made by the Competent
Authority is then placed before the Central Government for appropriate
decision and after considering such report and the relevant material on record,
if the Central Government is satisfied that such land is required for laying any
pipeline for the transport of petroleum or any other mineral, it may declare by
Notification in the official gazette that the right of user in the land for laying
the pipeline be acquired. Upon the publication of such declaration under
Section 6 the right of user in the land so specified vests absolutely in the
Central Government or in the State Government or in the Corporation free
from all encumbrances. Thus what stands acquired is the right of user in the
land in question for laying pipeline for the transport of petroleum or anyPage 26
26
mineral and not the land itself. The Statement of Objects and Reasons throws
light on this facet of the matter and shows that although the land could be
acquired outright for laying such pipelines under the Land Acquisition Act,
1894, such procedure for acquisition would be costly. For instance, as the
facts of the present case disclose the pipeline from Kakinada to Jamnagar
would be over 1470 kilometers in length. If the lands were to be acquired
outright, it would lead to tremendous increase in costs finally reflecting in
escalation of the costs of petroleum or minerals. At the same time, if at every
stage outright acquisition is to be insisted upon, many agriculturists would
stand deprived of their holdings causing great prejudice. The Act is thus
designed to achieve the purpose of laying of the pipelines for petroleum and
minerals as “efficient and cheap means of transportation and distribution of
petroleum and petroleum products”. At the same time Section 18 specifically
lays down that the provisions of the PMP Act shall be in addition and not in
derogation to any other law for the time being in force relating to acquisition
of land. Thus in a given case where the circumstances and the occasions so
demand, a resort could still be taken to acquire the lands by relying upon the
general law of acquisition under the provisions of the Land Acquisition Act,
1894. For instance, for monitoring the pressure gauges or in cases where
pipelines are branching in different directions, implementations to regulate the
flow may require permanent establishments necessitating acquisition of thePage 27
27
land itself rather than acquisition of a mere right of user. The PMP Act is thus
a special enactment designed to achieve the purpose of laying pipelines as
efficient means of transportation and with this idea it is only the right of user
in the land to lay such pipelines is acquired.
17. Section 7 stipulates that no pipeline be laid under any land which,
immediately before the date of Notification under Section 3(1) was used for
residential purposes, or any land on which there is permanent structure in
existence or any land which is appurtenant to a dwelling house. It is clear that
only such lands are to be considered for acquisition of right of user therein
which are either lying fallow or are being put to agricultural use. It is obvious
that care is taken to cause least possible damage to the holdings of the
concerned land-owners. According to Section 9, after the pipelines are laid,
the owner/occupier could use the land for the purpose for which it was being
used before the Notification under Section 3(1) was issued. Section 9
certainly, imposes some restrictions in the sense that such owner/occupier
cannot thereafter construct any building or any other structure or construct or
excavate any lake, reservoir or dam or plant any tree on such land. Barring
such restrictions, the owner/occupier is within his rights to use the land for the
same purpose for which the land was earlier being used. The point is clear
that neither the ownership in respect of the land itself nor the right to occupy
or possess that land is taken over permanently and those rights continue to
remain with the owner/occupier. What is taken over is only the right of user
namely to lay pipelines in the sub-soil of the land in question and the
restrictions imposed by Section 9 are designed to safeguard and secure the
pipelines underneath.
18. As laid down by this Court in Jilubhai Nanbhai Khachar and others
(Supra), the term property in legal sense means an aggregate of rights which
are guaranteed and protected by law and would extend to entirety or group of
rights inhering in a person. It was observed by this Court as under:
“42. Property in legal sense means an aggregate of rights
which are guaranteed and protected by law. It extends to every
species of valuable right and interest, more particularly,
ownership and exclusive right to a thing, the right to dispose of
the thing in every legal way, to possess it, to use it, and to
exclude everyone else from interfering with it. The dominion or
indefinite right of use or disposition which one may lawfully
exercise over particular things or subjects is called property. The
exclusive right of possessing, enjoying, and disposing of a thing
is property in legal parameters. Therefore, the word ‘property’
connotes everything which is subject of ownership, corporeal or
incorporeal, tangible or intangible, visible or invisible, real or
personal; everything that has an exchangeable value or which
goes to make up wealth or estate or status. Property, therefore,
within the constitutional protection, denotes group of rights
inhering citizen’s relation to physical thing, as right to possess,
use and dispose of it in accordance with law. In Ramanatha
Aiyar’s The Law Lexicon, Reprint Edn., 1987, at p.1031, it is
stated that the property is the most comprehensive of all terms
which can be used, inasmuch as it is indicative and descriptive of
every possible interest which the party can have. The term
property has a most extensive signification, and, according to its
legal definition, consists in free use, enjoyment, and disposition
by a person of all his acquisitions, without any control or
diminution, save only by the laws of the land.”Page 29
29
19. We therefore proceed on the premise that the right of user sought to be
taken over under the provisions of the PMP Act amounts to acquisition of one
of the facets of property rights which inher in the owner/occupier. For the
acquisition of such right of user, the compensation is prescribed in terms of
Section 10 of the PMP Act. There are two elements of compensation under
Section 10. The first part deals with any damage, loss or injury sustained by
any owner/occupier as a result of exercise of powers conferred by Sections
4,7 and 8 of the PMP Act that is to say the actual damage, loss or injury
sustained because of entry upon and/or digging or marking levels and survey
of land under Section 4 or while actual laying of the pipeline including
digging of trenches and carrying of requisite material for such operations
under Section 7 or at any stage of maintenance, examinations, repairing and
altering or removing of pipeline in terms of Section 8 of the PMP Act. The
measure for determining such compensation is given with sufficient clarity in
sub-section (3) of Section (10). The idea is to compensate the owner/occupier
for actual damage, loss or injury sustained by him as a result of the operations
carried out in terms of Section 4, Section 7 or Section 8 of the Act. One of
the indicia under sub-Section 3 could be “any injury to any other property
whether movable or immovable, or the earnings of such persons in any other
manner”. All possible acts as a result of which the damage, loss or injury
could be so occasioned are taken care of and stipulated in said sub-section.
Over and above such compensation for actual damage, loss or injury,
additional compensation @ 10% of the market value of the land is given to
the owner/occupier under sub-section 4 of Section 10 for taking over the right
of user to lay the pipelines. This element of additional compensation is
independent of any actual loss or damage and is purely linked to the value of
the land for the purposes of computation. This element of compensation is
purely for acquisition of right of user simplicitor. The damage/loss or injury
to the property is separately dealt with under first part of Section 10 and has
to be compensated in toto. Theoretically, it is possible that in a barren piece
of land as a result of exercise of powers under Sections 4, 6 and 7 there may
not be any damage/loss or injury. However compensation under sub-section
(4) for acquisition of right of user would still be independently payable. The
expression “in addition to the compensation, if any, payable under sub-section
(1)” clearly shows the intent that the compensation for acquisition of right of
user shall be in addition to the actual damage/loss or injury under first part of
Section 10. This part will also be clear from para (iii) of Statement of Objects
and Reasons extracted above.
20. The provisions of PMP Act do specify the principles and the manner in
which the compensation is to be determined. Not only the actual damage,
loss or injury suffered as a result of exercise of various activities in terms ofPage 31
31
Sections 4, 6 and 7 are compensated in toto but additionally compensation
linked to the market value of land is also to be given for acquisition of right of
user in respect of such land. What is taken over is mere right of user to lay
the pipeline in the sub-soil of land in question, leaving the title to the land as
well as the right to possess that land intact in the hands of the land
owner/occupier. It is no doubt that the enjoyment thereof after the pipelines
are laid is impaired to a certain extent, in that the owner/occupier cannot raise
any permanent construction or cause any excavation or plant any trees.
Barring such restrictions, the enjoyment and the right of possession remains
unaltered. The lands under which the pipeline would be laid are primarily,
going by the mandate of Section 7, agricultural or fallow and there would
normally be no occasion for any rendering of the holding completely unfit for
any operations. Even in such cases where the holding is rendered unfit,
sub-section 3(iii) of Section 10 could be relied upon and any diminution in
market value as permanent impairment could sustain a claim for
compensation. The principles of compensation as detailed in the PMP Act are
thus reasonable and cannot in any way be termed as illusory. The principle
laid down in H.D. Vora v. State of Maharashtra (Supra) has no application at
all.
21. Coming to the facts of the present case, Block Nos.331, 342 and 364 of
village Gothan were agricultural lands and recorded so in the revenue recordsPage 32
32
on the day the Notification under Section 3(1) was issued. The permission to
convert Block Nos.342 and 364 to non-agricultural use was granted after such
Notification. In any case, the compensation including damages, was arrived
at by consent in the meeting held with the land owners/occupiers and
determined at the level of Rs.181/- per sq.mtr. for lands other than those
falling in industrial zone and in respect of those falling in industrial zone, the
compensation was at Rs.201/- per sq.mtr. If the average rate at which the
lands were sold in preceding five years was taken into account, this
compensation was not inadequate. In any case, while the matter was pending
in the High Court, provisional compensation @ Rs.300/- per sq.mtr. was
deposited with the competent authority. This compensation in our view, for
acquisition of right of user cannot be called inadequate or illusory on any
count.
22. We now turn to the submissions advanced with respect to the terms
“Corporation” and “Competent Authority” under the PMP Act.
23. Natural gas is one of the most important and environment friendly
sources of energy. Easy access to the deposits of natural gas and quick and
cost effective transportation thereof are critical for fulfilling basic necessities
of the society. Petroleum and Natural Gas Regulatory Board Act, 2006
enacted by Parliament creates Petroleum and Natural Gas Regulatory BoardPage 33
33
to authorize entities to lay, build, operate or expand to a common carrier or
contract carrier; regulate access to common carrier or contract carrier;
regulate transport rates and ensure adequate availability of natural gas and
secure equitable distribution for petroleum products. The activity of
transportation of gas is thus recognized as an activity of highest national
importance and subjected to statutory control in all its dimensions.
Transportation of natural gas requires creation of necessary infrastructure
either by the State on its own or through private enterprise. The pipeline in
question was designed to sub-serve public interest and as rightly contended by
the learned Solicitor General the element of public interest is present all
through, even when the activity is undertaken through an entity in private
sector. Considering the nature of activity where entities in private sector are
encouraged to participate, it would be incorrect to put any restricted meaning
as regards the expression “Corporation”. The definition of “Corporation”
under Section 2(b) of the PMP Act is wide enough to include entities
in private sector. This definition is designedly kept wide enough to include all
such possibilities and there is no reason for giving any restricted meaning to
such expression. We, therefore, reject the submission advanced by the
appellants.
24. As per Section 2(a) of the PMP Act, “Competent Authority” means any
person or authority authorized by the Central Government to performPage 34
34
functions of the Competent Authority under that PMP Act. According to
Section 5, all objections preferred by interested persons to the laying of the
pipeline are to be dealt with and heard by the Competent Authority, who may
allow or disallow such objections. Under Section 5(3) the order so passed by
the Competent Authority is to be final. As per Section 6, the Competent
Authority thereafter has to make a report to the Central Government
containing his recommendations on the objections together with the record of
the proceedings held by him. After the order is passed by the Central
Government under Section 6(1), the role of the Competent Authority is to
assess compensation for damage, loss or injury occasioned to any person as a
result of exercise of the powers conferred under Sections 4, 7 and 8. Section
10(3) obliges the Competent Authority inter alia to have due regard to facets
enumerated in sub clauses (i), (ii) and (iii) of Section 10 (3). In addition, the
Competent Authority is also to determine the market value of the land, 10%
of which is required to be paid by way of compensation for acquisition of
right of user under Section 10 (4). Section 12 confers powers of Civil Court
on the Competent Authority.
25. It is thus clear that “Competent Authority” is given wide ranging
powers under Section 5 for considering the objections, under Section 6 for
making the report to the Central Government and under Section 10 for
determining compensation for damage/loss or injury under first part ofPage 35
35
Section and to determine the market value under the second part of the
Section. By virtue of these powers, crucial rights of the persons interested in
the land are bound to be affected. His orders and report would certainly deal
with variety of civil rights of the interested persons and issues pertaining to
compensation. At this stage, the observations of this Court in Trilok
Sudhirbhai Pandya (Supra), in the context whether the person appointed as
Competent Authority could be a person other than a public servant are quite
eloquent:-
“17. The aforesaid reference to the various provisions of
the Act shows that the competent authority has got vast powers,
which affects the rights of persons interested in the land over
which the pipeline is to be laid and on the reports of the
competent authority, the Central Government and the State
Government are to take decisions affecting the rights of persons
interested in the land. Under the provisions of the Act, therefore,
the competent authority does not merely determine the
compensation at the first instance in accordance with the
statutory rules as has been contended by the learned counsel for
Respondent 4, but has to perform various other quasi-judicial
functions which are normally performed by public servants
whose pay allowances and other incidentals of service are met
out of the public exchequer. If instead of public servants, a
person is appointed whose pay, allowances and other incidentals
are not paid out of the public exchequer but directly paid by a
private employer such as Respondent 4, for whom the right of
user is being acquired and by whom the compensation is
payable, persons interested in the land will have reasonable
grounds for assuming that such a competent authority, who is
dependent on a private corporation for his salary, allowances,
accommodation and transport allowances, will have a bias in
favour of the private corporation.”Page 36
36
26. It is axiomatic that a person who occupies the position of Competent
Authority under the PMP Act must evoke and enjoy public confidence.
Neither the Act nor the Rules framed thereunder deal with the qualifications
required of a person before his appointment as Competent Authority nor do
they deal with any transparent process for such appointment. We may now
turn to see the requirements in that behalf in an enactment which is pari
materia. Section 2(e) of the Metro Railway (Construction of Works) Act,
1978 (Metro Act, for short), defines Competent Authority as the one
appointed under Section 16. Section 16(2) then sets out, “a person shall not
be qualified for appointment as a Competent Authority unless he is holding,
or has held, a Judicial Office, not lower in rank than that of a Subordinate
Judge.” Like the PMP Act, the Metro Act also confers power upon the
Competent Authority therein to consider objections to the construction of the
Metro Railway or any other work and to determine the amount payable for
acquisition. The orders passed by the Competent Authority under the Metro
Act are also appealable before an Appellate Authority. In our view, the
Competent Authority under the provisions of the PMP Act must also be
someone who is holding or has held a Judicial Office not lower in rank than
that of a Subordinate Judge or is a trained legal mind. If such requirement is
not read into and not taken as an integral and essential qualification before
appointment of any person as Competent Authority, the provisions in thatPage 37
37
behalf will not be consistent with the doctrine of fairness under Article 14 of
the Constitution of India. At the same time, we hasten to add that actions
taken by the Competent Authority till now, will not in any way stand impaired
or be invalidated purely on this count. But the Central Government may do
well to step in immediately and remedy the situation with appropriate
measures.
27. Lastly, it is correct that the PMP Act and the Rules framed thereunder
do not stipulate any period within which compensation for damage, loss or
injury and compensation for acquisition of right of user is to be deposited.
While damage, loss or injury occasioned as a result of exercise of power
under Sections 4 and 7 could be one time damage, that in respect of Section 8
could re-occur as a result of repeated entries for maintenance. Even when no
time limit is fixed, it is expected of the concerned authorities to determine and
deposit compensation within reasonable time. In so far as the facts of the
present case are concerned, ninety percent of the amount so determined by the
Competent Authority in the first instance, was deposited in advance.
28. We thus do not find the provisions regarding computation of
compensation with regard to both elements under Section 10 of the PMP Act
to be invalid on any count. We further find that the definition “Corporation”
is wide enough to take within its sweep entities in private sector as well. We
also do not find the provisions of the PMP Act to be lacking on any count,
except to the extent indicated above as regards appointment of Competent
Authority. Civil Appeals are thus disposed of without any order as to costs.
…………………….…J.
(V. Gopala Gowda)
..…………..…….……J.
(Uday Umesh Lalit)
New Delhi,
October 05, 2016
Print Page
others v. State of Gujarat and another4
, the right of user is a property
right which can be acquired. Further, it is not necessary that the
acquisition should be of “whole” of property rights or ownership rights.
The acquisition could be “partial” and the principles land down in the
PMP Act are designed to give fair and just compensation for acquisition
of such right of user.
As laid down by this Court in Jilubhai Nanbhai Khachar and others
(Supra), the term property in legal sense means an aggregate of rights which
are guaranteed and protected by law and would extend to entirety or group of
rights inhering in a person. It was observed by this Court as under:
“42. Property in legal sense means an aggregate of rights
which are guaranteed and protected by law. It extends to every
species of valuable right and interest, more particularly,
ownership and exclusive right to a thing, the right to dispose of
the thing in every legal way, to possess it, to use it, and to
exclude everyone else from interfering with it. The dominion or
indefinite right of use or disposition which one may lawfully
exercise over particular things or subjects is called property. The
exclusive right of possessing, enjoying, and disposing of a thing
is property in legal parameters. Therefore, the word ‘property’
connotes everything which is subject of ownership, corporeal or
incorporeal, tangible or intangible, visible or invisible, real or
personal; everything that has an exchangeable value or which
goes to make up wealth or estate or status. Property, therefore,
within the constitutional protection, denotes group of rights
inhering citizen’s relation to physical thing, as right to possess,
use and dispose of it in accordance with law. In Ramanatha
Aiyar’s The Law Lexicon, Reprint Edn., 1987, at p.1031, it is
stated that the property is the most comprehensive of all terms
which can be used, inasmuch as it is indicative and descriptive of
every possible interest which the party can have. The term
property has a most extensive signification, and, according to its
legal definition, consists in free use, enjoyment, and disposition
by a person of all his acquisitions, without any control or
diminution, save only by the laws of the land.”
19. We therefore proceed on the premise that the right of user sought to be
taken over under the provisions of the PMP Act amounts to acquisition of one
of the facets of property rights which inher in the owner/occupier. For the
acquisition of such right of user, the compensation is prescribed in terms of
Section 10 of the PMP Act. There are two elements of compensation under
Section 10. The first part deals with any damage, loss or injury sustained by
any owner/occupier as a result of exercise of powers conferred by Sections
4,7 and 8 of the PMP Act that is to say the actual damage, loss or injury
sustained because of entry upon and/or digging or marking levels and survey
of land under Section 4 or while actual laying of the pipeline including
digging of trenches and carrying of requisite material for such operations
under Section 7 or at any stage of maintenance, examinations, repairing and
altering or removing of pipeline in terms of Section 8 of the PMP Act. The
measure for determining such compensation is given with sufficient clarity in
sub-section (3) of Section (10). The idea is to compensate the owner/occupier
for actual damage, loss or injury sustained by him as a result of the operations
carried out in terms of Section 4, Section 7 or Section 8 of the Act. One of
the indicia under sub-Section 3 could be “any injury to any other property
whether movable or immovable, or the earnings of such persons in any other
manner”. All possible acts as a result of which the damage, loss or injury
could be so occasioned are taken care of and stipulated in said sub-section.
Over and above such compensation for actual damage, loss or injury,
additional compensation @ 10% of the market value of the land is given to
the owner/occupier under sub-section 4 of Section 10 for taking over the right
of user to lay the pipelines. This element of additional compensation is
independent of any actual loss or damage and is purely linked to the value of
the land for the purposes of computation. This element of compensation is
purely for acquisition of right of user simplicitor.
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10019 OF 2016
(Arising out of SLP(C) No.2725 of 2010)
Laljibhai Kadvabhai Savaliya & Ors.
V
State of Gujarat & Ors.
Citation:(2016) 9 SCC791
Dated:October 05, 2016
1. Leave granted. These appeals take exception to the common judgment and
order dated 13.07.2009 passed by the High Court of Gujarat at Ahmedabad in
Special Civil Application Nos.5107 of 2008, 4321 of 2008, 824-853 of 2008
and 899-916 of 2008. Since all these appeals raise identical issues, they are
dealt with and disposed of by this common judgment.
2. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land)
Act, 1962 (herein referred to as the “PMP Act”) was enacted by Parliament to
provide for the acquisition of right of user in land for laying pipelines for the
transport of petroleum and minerals and for incidental matters, with following
Statement of Objects and Reasons :-
“As a result of the implementation of plans for the
development of petroleum resources in the country, it is
anticipated that in the next few years there will be a substantial
increase in the production of crude oil, natural gas and petroleum
products by the public sector oilfields and refineries in India. It
has therefore become necessary to lay petroleum pipelines in the
country to serve as an efficient and cheap means of transportation
and distribution of petroleum and petroleum products.
2. Although land can be acquired outright for laying such
pipelines under the Land Acquisition Act, 1894 the procedure for
such acquisition is long-drawn and costly. Since the petroleum
will be laid underground outright acquisition of land is not
necessary. Therefore, in the case of these pipelines it is
considered sufficient to acquire the mere right of user in the land
for laying and maintaining the pipelines. The Bill seeks to
achieve the above purpose.
3. The main features of the Bill are–
(i). No right of user of land can be acquired for the purpose of
laying pipelines unless the Central Government declares its
intention by Notification in the Official Gazette, and unless
objections, if any, filed within twenty-one days of that
Notification are disposed of by the competent authority.
(ii). When final declaration about acquisition is made the right
to use land for the purpose of laying pipelines will vest in thePage 3
3
Central Government, State Government or the corporation, as the
case may be but notwithstanding such acquisition, the owner or
occupier of the land shall be entitled to use the land for the
purpose for which such land was put to use immediately before
the declaration by the Central Government. But after the date of
acquisition he shall not construct any building or any other
structure or construct or excavate any tank, well, reservoir or dam
or plant any tree, on that land.
iii). Compensation for the damage, loss or injury sustained by
any person interested in the land shall be payable to such person.
Besides this, compensation calculated at ten per cent of the
market value of the land on the date of the preliminary
Notification is also payable to the owner and to any other person
whose right of enjoyment in the land has been affected by reason
of the acquisition. The compensation in both cases is to be
determined by the competent authority in the first instance and an
appeal lies from its decision to the District Judge.”
3. Section 2 of the PMP Act defines certain expressions. In terms of Section 3,
the Central Government is empowered to acquire the right of user in any land.
Under Section 4, it is lawful for any authorized person to enter upon and
cause survey in respect of such land. Under Section 5, any person interested
in the land can object to the laying of the pipelines under the land. The
objections so preferred are to be dealt with by the Competent Authority who
would then make a report for the decision of the Central Government. Under
Section 6 if the Central Government is satisfied that the land is required for
laying any pipeline for transport of petroleum or any mineral, it may declare
so by Notification in the Official Gazette, whereafter the right of user shall
vest absolutely in the Central Government or in the State Government or thePage 4
4
Corporation as directed. After the right of user stands so vested it is lawful to
lay pipelines in terms of Section 7. Section 9 incorporates certain restrictions
regarding the use of such land and Section 10 lays down principles for award
of compensation in respect of acquisition of the right of user of any land and
also in respect of any damage or loss sustained by any person interested in the
land. The relevant Sections namely Sections 2, 3, 6, 7, 9 ,10 and 18 of the
PMP Act are as under:-
“2. Definitions. – In this Act, unless the context otherwise
requires–
(a) "competent authority" means any person or authority
authorised by the Central Government, by Notification in the
Official Gazette, to perform the functions of the competent
authority under this Act 1 and different persons or authorities may
be authorised to perform all or any of the functions of the
competent authority under this Act in the same area or different
areas specified in the Notification;
(b) "corporation" means anybody corporate established under any
Central, Provincial or State Act, and includes—
(i) a company formed and registered under the Companies
Act, 1956; and
(ii) a company formed and registered under any law
relating to companies formerly in force in any part of India;
(ba) "minerals" have the meanings assigned to them in the Mines
Act, 1952 (35 of 1952), and include mineral oils and stowing
sand but do not include petroleum;
(c) "petroleum" has the same meaning as in the Petroleum Act,
1934 (30 of 1934), and includes natural gas and refinery gas;
(d) "prescribed" means prescribed by rules made under this Act.Page 5
5
3. Publication of Notification for acquisition.– (1) Whenever it
appears to the Central Government that it is necessary in the public
interest that for the transport of petroleum 2 or any mineral] from
one locality to another locality pipelines may be laid by that
Government or by any State Government or a corporation and that
for the purpose of laying such pipelines it is necessary to acquire
the right of user in any land under which such pipelines may be
laid, it may, by Notification in the Official Gazette, declare its
intention to acquire the right of user therein.
(2) Every Notification under sub-section (1) shall give a brief
description of the land.
3) The competent authority shall cause the substance of the
Notification to be published at such places and in such manner as
may be prescribed.
6. Declaration of acquisition of right of user.– (1) Where no
objections under subsection (1) of section 5 have been made
to the competent authority within the period specified therein
or where the competent authority has disallowed the
objections under sub-section (2) of that section, that authority
shall, as soon as may be, 1 either make a report in respect of
the land described in the Notification under sub-section (1) of
section 3, or make different reports in respect of different
parcels of such land, to the Central Government containing
his recommendations on the objections, together with the
record of the proceedings held by him, for the decision of that
Government and upon receipt of such report the Central
Government shall if satisfied that such land is required for
laying any pipeline for the transport of petroleum or any
mineral, declare, by Notification in the Official Gazette, that
the right of user in the land for laying the pipelines should be
acquired and different declarations may be made from time to
time in respect of different parcels of the land described in the
Notification issued under sub-section (1) of section 3,
irrespective of whether one report or different reports have
been made by the competent authority under this section.
(2) On the publication of the declaration under sub-section (1),
the right of user in the land specified therein shall vest absolutely
in the Central Government free from all encumbrances. Page 6
6
(3) Where in respect of any land, a Notification has been issued
under sub-section (1) of section 3 but 3no declaration in respect
of any parcel of land covered by that Notification has been
published under this section within a period of one year from the
date of that Notification, that Notification shall cease to have
effect on the expiration of that period.
(3A) No declaration in respect of any land covered by a
Notification issued under subsection (1) of section 3, published
after the commencement of the Petroleum Pipelines (Acquisition
of Right of User in Land) Amendment Act, 1977 (13 of 1977),
shall be made after the expiry of three years from the date of
such publication.
(4) Notwithstanding anything contained in sub-section (2), the
Central Government may, on such terms and conditions as it may
think fit to impose, direct by order in writing, that the right of
user in the land for laying the pipelines shall, instead of vesting
in the Central Government vest, either on the date of publication
of the declaration or, on such other date as may be specified in
the direction, in the State Government or the corporation
proposing to lay the pipelines and thereupon the right of such
user in the land shall, subject to the terms and conditions so
imposed, vest in that State Government or corporation, as the
case may be, free from all encumbrances.
7. Central Government or State Government or
corporation to lay pipelines.– (1) Where the right of user in any
land has vested in the Central Government or in any State
Government or Corporation under section 6–
(i) it shall be lawful for any person authorised by the Central
Government or such State Government or corporation, as the
case may be, and his servants and workmen to enter upon the
land and lay pipelines or to do any other act necessary for the
laying of pipelines:
Provided that no pipeline shall be laid under– Page 7
7
(a) any land which, immediately before the date of the
Notification under sub-section (1) of section 3, was used for
residential purposes;
(b) any land on which there stands any permanent structure
which was in existence immediately before the said date;
(c) any land which is appurtenant to a dwelling house; or
(d) any land at a depth which is less than one metre from the
surface;
(ia) for laying pipelines for the transport of petroleum, it shall be
lawful for any person authorised by the Central Government or
such State Government or corporation to use such land for laying
pipelines for transporting any mineral and where the right of user
in any land has so vested for laying pipelines for transporting any
mineral, it shall be lawful for such person to use such land for
laying pipelines for transporting petroleum or any other mineral;
and
(ii) such land shall be used only for laying the pipelines and for
maintaining, examining, repairing, altering or removing any such
pipelines or for doing any other act necessary for any of the
aforesaid purposes or for the utilisation of such pipelines.
(2) If any dispute arises with regard to any matter referred to in
paragraph (b) or paragraph (c) of the proviso to clause (i) of subsection
(1), the dispute shall be referred to the competent
authority whose decision thereon shall be final.
9. Restrictions regarding the use of land.– (1) The owner
or occupier of the land with respect to which a declaration has
been made under sub-section (1) of section 6 shall be entitled to
use the land for the purpose for which such land was put to use
immediately before the date of the Notification under sub-section
(1) of section 3:
Provided that, such owner or occupier shall not after the
declaration under sub-section (1) of section 6 –
(i) construct any building or any other structure; Page 8
8
(ii) construct or excavate any tank, well, reservoir or dam; or
(iii) plant any tree, on that land.
(2) The owner or occupier of the land under which any pipeline
has been laid not do any act or permit any act to be done which
will or is likely to cause any damage in any manner whatsoever
to the pipeline.
(3) Where the owner or occupier of the land with respect to
which a declaration has been made under sub-section (1) of
section 6-
(a) constructs any building or any other structure, or
(b) constructs or excavates any well, tank, reservoir or dam, or
(c) plants any tree,
on that land, the Court of the District Judge within the local
limits of whose jurisdiction such land is situate may, on an
application made to it by the competent authority and after
holding such inquiry as it may deem fit, cause the building,
structure, reservoir, dam or tree to be removed or the well or tank
to be filled up, and the costs of such removal or filling up shall
be recoverable from such owner or occupier in the same manner
as if the order for the recovery of such costs were a decree made
by that Court.
10. Compensation.– (1) Where in the exercise of the powers
conferred by section 4, section 7 or section 8 by any person, any
damage, loss or injury is sustained by any person interested in
the land under which the pipeline is proposed to be, or is being,
or has been laid, the Central Government, the State Government
or the corporation, as the case may be, shall be liable to pay
compensation to such person for such damage, loss or injury, the
amount of which shall be determined by the competent authority
in the first instance.
(2) If the amount of compensation determined by the competent
authority under subsection (1) is not acceptable to either of the
parties, the amount of compensation shall, on application byPage 9
9
either of the parties to the District Judge within the limits of
whose jurisdiction the land or any part thereof is situated, be
determined by that District Judge.
(3) The competent authority or the District Judge while
determining the compensation under sub-section (1) or
sub-section (2), as the case may be, shall have due regard to the
damage or loss sustained by any person interested in the land by
reason of—
(i) the removal of trees or standing crops, if any, on the land
while exercising the powers under section 4, section 7 or section
8;
(ii) the temporary severance of the land under which the pipeline
has been laid from other lands belonging to, or in the occupation
of, such person; or
(iii) any injury to any other property, whether movable or
immovable, or the earnings of such persons caused in any other
manner:
Provided that in determining the compensation no account shall
be taken of any structure or other improvement made in the land
after the date of the Notification under sub-section (1) of section
3.
(4) Where the right of user of any land has vested in the Central
Government, the State Government or the corporation, the
Central Government, the State Government or the corporation, as
the case may be, shall, in addition to the compensation, if any,
payable under subsection (1), be liable to pay to the owner and to
any other person whose right of enjoyment in that land has been
affected in any manner whatsoever by reason of such vesting,
compensation calculated at ten per cent. of the market value of
that land on the date of the Notification under sub-section (1) of
section 3.
(5) The market value of the land on the said date shall be
determined by the competent authority and if the value so
determined by that authority is not acceptable to either of the
parties, it shall, on application by either of the parties to thePage 10
10
District Judge referred to in subsection (2), be determined by that
District Judge.
(6) The decision of the District Judge under sub-section (2) or
sub-section (5) shall be final.
18. Application of other laws not barred. – The provisions
of this Act shall be in addition to and not in derogation of any
other law for the time being in force relating to acquisition of
land.
4. In exercise of the powers conferred by Section 3 of the PMP Act, the Central
Government by Notification published on 07.01.2006 in the Gazette of India
declared its intention to acquire the right of user in respect of certain lands.
Said Notification was as under:-
“Whereas it appears to the Central Government that it is
necessary in the public interest that for the transportation of
natural gas through an interconnection between
Jamnagar-Bhopal and Kakinada-Hyderabad-Goa pipeline a
pipeline should be laid by Gas Transportation and Infrastructure
Company Ltd1
.
And whereas it appears to the Central Government that for
the purpose of laying the said pipeline, it is necessary to acquire
the right of user in land under which the said pipeline is proposed
to be laid and which is described in the Schedule annexed to this
Notification.
Now, therefore, in exerciser of the powers conferred by
sub-section (1) of Section 3 of the Petroleum and Minerals
Pipelines (Acquisition of Right of User in Land) Act, 1962 (50 of
1962), the Central Government hereby declares its intention to
acquire the right of user therein.
1
The name has since then been changed to Reliance Gas Transportation Infrastructure Ltd.Page 11
11
Any person interested in the land described in the said
Schedule may, within twenty one days from the date on which
the copies of this Notification as published in the Gazette of
India under sub-section (1) of Section 3 of the said Act, are made
available to the general public, object in writing to the
acquisition of the right of user therein for laying of the pipeline
under the land to Shri A.K. Sanghavi, Competent Authority, Gas
Transportation and Infrastructure Company Limited Pipeline
Project, Anand Mahal Apartment, Opposite to Bhulka Bhavan
School, Anand Mahal Road, Surat-395009, Gujarat.”
The Notification set out details of survey numbers of lands from
different villages and the extent of land in respect of which right of user was
sought to be acquired.
5. In these matters we are concerned with Block Nos.331, 342 and 364 of
Village Gothan, District Surat which were mentioned in the aforesaid
Notification published on 07.01.2006. In so far as Block No.331 is concerned,
non-agricultural permission was granted on 03.03.1982. However, since there
was no construction within the stipulated time, this non-agricultural
permission is said to have lapsed by efflux of time. In any case the land had
always been shown as agricultural land in Revenue Records. The appellant
Nos.1 to 3 in appeal arising from SLP(Civil) Nos.2228-2257 of 2010 are
stated to have purchased land admeasuring 29,370 sq.mtrs. and 8,531 sq.mtrs.
from Block No.331 and thereafter sold sub-plots to about 70 persons
including appellant Nos.4 to 29 in that appeal. The appellant No.1 in appeal
arising out from SLP(Civil) Nos.2260-2277 of 2010 along with his brother is
said to have purchased land admeasuring 50,691 sq.mtrs. from Block Nos.
342 and 364 and sold individual plots from that land to 68 persons including
appellant Nos.2 to 18 in said appeal.
6. On 07.03.2006, One Mr. V.I. Gohil, retired Deputy Collector was appointed as
Competent Authority vide Notification dated 7.03.2006 issued by the Central
Government which was published on 11.03.2006 in the Official Gazette.
Thereafter all the recorded owners were sought to be served with notices
inviting them to prefer objections to the proposed acquisition of right of user.
Some of the land-owners filed their objections in respect of proposed
acquisition. The Competent Authority had fixed the hearing on 2.08.2007.
After considering the objections and hearing those who were present
including appellant No.1 Laljibhai, the Competent Authority forwarded its
Report dated 7.08.2007 to the Central Government. The report indicates that
the Competent Authority had held meetings with the owners/occupiers as well
as the representatives of RGTIL. The report further shows that the average
rate at which the lands in village Gothan were sold during the years
2002-2005 was Rs.13.40 per sq.mtr. The compensation determined by
consent was Rs.181/- per sq.mtr. including damages under Section 10(1) for
lands other than those falling in industrial zone. For those lands falling in
industrial zone, the compensation was increased to the level of Rs.201/- per
sq.mtr. by consent. Ninety percent of this compensation was paid in advance.
Thereafter, spot verification was undertaken and photographs were taken
which show that there was no construction on the lands in question. In the
meantime, by order dated 29.03.2007 District Panchayat Office, Revenue
Branch, Surat had accorded permission for conversion of certain lands
including Block Nos.342 and 364 of village Gothan to non-agricultural use
for the industrial purposes. The order shows that the steps to seek such
permission were taken and the recommendations in that behalf were made
after the publication of the aforesaid Notification on 7.01.2006.
7. After considering the report of the Competent Authority, by Notification
dated 17.11.2007 issued in exercise of the powers conferred by Section 6 of
the PMP Act, the Government of India directed that the right of user in
respect of land mentioned in said Notification dated 17.11.2007 shall stand
vested in M/s Reliance Gas Transportation Infrastructure Ltd. (“RGTIL” for
short) free from all encumbrances. The Notification reads as under:-
“S.O. Whereas by Notification of the Government of India
in the Ministry of Petroleum and Natural Gas Number S.O. 41
dated 06th January, 2006, issued under the sub-section (1) of
Section 3 of the Petroleum and Minerals Pipelines (Acquisition
of Right of User in Land) Act, 1962 (50 of 1962) (hereinafter
referred to as the said Act), the Central Government declared its
intention to acquire the right of user in the land, specified in the
Schedule appended to that Notification for the purpose of laying
Kakinada-Hyderabad-Uran-Ahmedabad gas pipeline for
transportation of natural gas by M/s Reliance Gas Transportation
Infrastructure Limited to various Consumers of District Surat in
the State of Gujarat
And, whereas copies of the said Gazette Notification were,
made available to the public on or before 08th September, 2007;
And whereas, the objections received from the public to
the laying of the pipeline have been considered and disallowed
by the Competent Authority;
And whereas the competent authority has, under
sub-section (1) of Section 6 of the said Act, submitted reports to
the Government of India;
And whereas the Central Government, after considering
the said report and on being satisfied that the said land is
required for laying the pipeline, has decided to acquire the right
of user therein;
Now, therefore, in exercise of the powers conferred by
sub-section (1) of Section 6 of the said Act, the Central
Government hereby declares that the right of user in the land
specified in the Schedule appended to this Notification is hereby
acquired for laying the pipeline;
And, further, in exercise of the powers conferred by
sub-section (4) of Section 6 of the said Act, the Central
Government hereby directs that the right of user in the said land
for laying the pipeline shall, instead of vesting in the Central
Government, vest, on the date of the publication of the
declaration, in M/s Reliance Gas Transportation Infrastructure
Limited free from all encumbrances.”
The Schedule appended to the Notification included Block Nos.331,
342 and 364 of village Gothan and the extent of land in respect of which right
to user was acquired from these Blocks was mentioned as 2295 sq.mtrs., 5047
sq. mtrs. and 3424 sq. mtrs respectively.
8. In the physical verification of Block Nos.342 and 364 carried out in January,
2008, it was seen that some of the owners had commenced construction
activities. A communication was therefore addressed by the Competent
Authority on 08.01.2008 to the District Development Officer, Surat annexing
Notifications issued under Sections 3 and 6 of the PMP Act. Around this time
the owners/occupiers of Block Nos.331, 342 and 364 filed Special Civil
Application Nos.824-898 of 2008 and Nos.899-966 of 2008 before the High
Court of Gujarat seeking declaration that RGTIL had no authority to enter the
lands of said owners/occupiers and that it be accordingly restrained. Notices
were issued in the aforesaid Special Civil Applications on 04.02.2008 and
according to the respondents therein, it was only then it came to their
knowledge that non-agricultural permissions were granted on 03.03.1982 in
respect of Block No.331 and on 29.03.2007 in respect of Block Nos.342 and
364. RGTIL challenged these non-agricultural permissions by filing Special
Civil Application Nos.2252 of 2008 and 3380 of 2008. The High Court by its
interim orders dated 06.02.2008 in Special Civil Application No.2252 of 2008
and 21.02.2008 in Special Civil Application No.3380 of 2008 stayed the
operation of non-agricultural permissions in respect of aforesaid Block
Nos.342, 364 and 331. These interim orders as well as the orders refusing
interim relief in Special Civil Application Nos.8992 and 996 of 2008
preferred by the owners/occupiers themselves, were challenged by filing
Letters Patent Appeals. In those appeals, the Division Bench of the High
Court permitted RGTIL who had by then started laying the pipelines to cover
the ditches and to produce the memorandum to that effect in Special Civil
Application Nos.899-966 of 2008 and in 2252 of 2008.
9. The owners/occupiers of Block Nos.342 and 364 also preferred Special Civil
Application No.5107 of 2008 on or about 24.03.2008 challenging the
Notification issued by the Central Government under Section 6 of the PMP
Act. This Special Civil Application No.5107 of 2008 was heard along with
other Special Civil Applications referred to herein above and the High Court
by its order dated 11.07.2008 held that the balance of convenience was in
favour of RGTIL and as such the prayers for interim relief by the
owners/occupiers were rejected. The High Court recorded the statement of the
Counsel who appeared for RGTIL that it would deposit with the Competent
Authority provisional compensation @ Rs.300/- per sq.mtr. for the lands
including constructions thereon. Accordingly provisional compensation at the
aforesaid rate was deposited by RGTIL with the Competent Authority.
10. Thereafter, number of petitioners namely 70 from Special Civil Application
No.5107 of 2008, 150 from Special Civil Application No.4321 of 2008, 75
from Special Civil Application Nos.824-853 of 2008 and 68 from Special
Civil Application Nos.899-916 of 2008 withdrew their challenge, leaving the
remaining petitioners to contest the matter. The Division Bench of the High
Court by its judgment and order dated 13.07.2009, which is presently under
appeal, disposed of aforesaid Special Civil Application Nos.824-853,Page 17
17
899-966, 5107 and 4321 of 2008 filed by the owners/occupiers and Special
Civil Application Nos.2252 and 3380 of 2008 filed by RGTIL with following
observations:-
“Learned counsel for the landowners fairly submitted that
none of the petitioners have challenged the validity of Section
3(1) Notification. No grievance is also raised before us in these
proceedings against the order passed by the competent authority
under sub-section (2) to Section 5 of the Act……….
We find that the pipelines have already been laid over the
properties of the petitioners. Petitioners had not challenged at
any point of time the Notification issued under Section 3(1) of
the Act. Majority of the petitioners have withdrawn from the
writ petitions as a whole. So far as remaining petitioners are
concerned, it seems that their grievance is only about inadequacy
of compensation. Section 10 of the Act specifically says that if
any party has any grievance with regard to any damage, loss,
injury or inadequacy of compensation, they can always approach
the District Judge within the limits of whose jurisdiction the land
is situated. Since effective remedy is provided under the Act, this
Court under writ jurisdiction is not justified in expressing any
opinion regarding various contentions raised by the petitioners,
especially when Section 3(1) Notifications has not been
challenged and also due to the fact that pipelines have already
been laid down.
Under the circumstances, all these matters are disposed of
with a direction that if the petitioners are aggrieved they can
approach the concerned District Judge claiming compensation
and obtain appropriate orders in accordance with law.”
11. These appeals at the instance of the owners/occupiers challenge the
correctness of the decision of the High Court. RGTIL however accepted the
judgment and did not prefer any challenge. It may be mentioned that the very
same owners/occupiers had also filed Writ Petition No.569 of 2009 in thisPage 18
18
Court challenging the vires of some of the provisions of the PMP Act.
However at the request of the petitioners, said Writ Petition No.569 of 2009
was allowed to be withdrawn on 07.01.2010. While the aforesaid matters
were pending, in another batch of matters the question of bias of the
Competent Authority was put in issue. Those matters were allowed by this
Court by its decision reported in Trilok Sudhirbhai Pandya v. Union of
India and others.2
This Court directed Union of India to appoint another
person as Competent Authority for determination of compensation but made it
clear that the judgment therein would not affect any orders with regard to
acquisition of right of user.
12. On or about 05.11.2011, an application was filed on behalf of the
appellants herein praying that appropriate directions be issued to the
Competent Authority to decide the compensation payable to the
owners/occupiers under Section 9 as well as under Section 10 at the time of
taking actual possession. Thereafter, another application namely I.A. No.5 of
2013 was filed seeking permission to raise additional grounds. By raising
these grounds, the appellants submitted that PMP Act and the rules framed
thereunder were violative of the constitutional framework. This Court by its
order dated 10.02.2014 issued notices to State of Gujarat as well as to the
2
(2011) 10 SCC 203
learned Solicitor General of India in aforesaid I.A. No.5 of 2013 and by
subsequent order dated 02.02.2016, said application was allowed. Union of
India and other respondents were permitted to file their affidavits in reply and
it was clarified that it would be permissible for any other interested person(s)
to join these proceedings. Further, by order dated 18.03.2016, this Court
stayed further proceedings before the Competent Authority.
13. Before we deal with the challenge raised in these appeals, it must be
noted that none of the landowners had challenged the validity of Section 3(1)
Notification issued in the instant case nor any grievance was raised against
the order passed by the Competent Authority under Section 5(2) of the PMP
Act. Though a substantive Writ Petition challenging the vires of some of the
provisions of the PMP Act was filed, that petition was also withdrawn,
without seeking any liberty. Even then, we have heard the submissions
regarding validity of the PMP Act. We have heard Mr. Amar Dave, learned
Advocate in support of the appeals, Mr. Ranjit Kumar, learned Solicitor
General of India, Dr. A.M. Singhvi and Mr. Paras Kuhad, learned Senior
Advocates for RGTIL, Mr. Harin Rawal learned Senior Advocate for the
Competent Authority, Mr. Preetesh Kapoor, learned Advocate for State of
Gujarat and Mr. K.K. Venugopal, learned Senior Advocate for the intervener
namely Gujarat State Petronet Ltd.Page 20
20
14. On behalf of the appellants, it was submitted:-
A. Though under the PMP Act right of user simplicitor in respect of
notified lands is acquired, for all practical purposes the
owners/occupiers stand deprived of their proprietary interest and
enjoyment of the lands in toto. According to Section 9 the user of the
land stands frozen for all times to come and the owners/occupiers
would not be allowed to use or utilize the land for any construction.
The acquisition of right of user thus amounts to complete deprivation.
B. The PMP Act is a legislation to bypass the due process of law
contemplated under the Land Acquisition Act, 1894. The entire exercise
contemplated under the PMP Act is nothing but acquisition of the entire
interest of the owners/occupiers in respect of such land. Reliance was
placed on the decision of this Court in H.D. Vora v. State of
Maharashtra and others.3
C. The PMP Act was enacted in 1962 when the activities like
production of crude oil, natural gas and petroleum products as well as
transportation and distribution of petroleum and petroleum products
were exclusively in public sector. The then Industrial Policy was relied
upon in support of this submission. Additionally, reliance was also
3
1984 SCR (2) 693/(1984) 2 SCC 337
placed on the Statement of Objects and Reasons to submit that certain
expressions like “Corporation” appearing in Section 2(b) ought to be
construed to confine to Corporations in public sector and the PMP Act
ought not to be invoked in favour of a company in private sector.
D. Certain provisions of the PMP Act were highlighted to show that
there was complete absence of requisite framework leading to unfair
treatment to the land owners.
1. The Competent Authority is to discharge important
functions like hearing of objections, making a report to the
Central Government and deciding the quantum of compensation
in the first instance. However unlike other pari materia
enactments no qualifications are prescribed for appointment of a
person as Competent Authority.
2. Upon publication of the declarations under Section 6(1),
the right of user in the lands stands vested free from all
encumbrances. The statutory scheme shows that after such
vesting, the compensation for the loss or injury suffered under
Sections 4, 7 and 8 and compensation under Section 10 is to be
determined. Neither the Act nor the Rules contemplate any
period within which compensation for such damage, loss orPage 22
22
injury and compensation for acquisition of right of user is to be
deposited or paid.
3. There are no guidelines in the PMP Act that the pipelines
should be laid in such a way so as to cause least amount of
damage or loss to the occupiers.
15. In reply, it was submitted by the learned Solicitor General and all other
Counsel:-
A. As laid down by this Court in Jilubhai Nanbhai Khachar and
others v. State of Gujarat and another4
, the right of user is a property
right which can be acquired. Further, it is not necessary that the
acquisition should be of “whole” of property rights or ownership rights.
The acquisition could be “partial” and the principles land down in the
PMP Act are designed to give fair and just compensation for acquisition
of such right of user.
B. Proviso to Section 7(1) of the PMP Act mandates that no pipeline
shall be laid under any land which was used for residential purposes, or
any land wherein any permanent structure was in existence before the
date on which Notification under Section 3(1) was issued or any land
which is appurtenant to a dwelling house. The pipeline would be laid
4
(1995) Suppl 1 SCC 596Page 23
23
under lands which are primarily fallow lands or those used for
agricultural purposes. After the pipeline is so laid, the land could
certainly be used for the purpose for which it was used before such
Notification was issued. The agricultural operations could still be
continued and the ownership in respect of land is left untouched. The
vesting provisions of the PMP Act make it clear that it is an Act relating
to acquisition of a limited right namely the right of passage under the
sub-soil to enable the laying of pipelines. It would be incorrect to term
the PMP Act to be acquiring proprietary interest of the land owners in
the land or taking over their right to possess the lands in question.
C. Relying on enactments such as the National Highways Act,
1956, the Railways Act, 1989, the Delhi Metro Railway (Construction
of Works) Act, 1978, the Indian Telegraph Act, 1885 it was submitted
that for sub-serving the societal needs, right of user simplicitor is
required to be acquired rather than acquiring the entirety of interest in
the land itself.
D. The definition of “Corporation” is wide enough to include
Companies in Private Sector. With the expanding frontiers where the
private sector is allowed entry in production and manufacture of
petroleum, petroleum products and natural gas as well as transportation
thereof, the definition of “Corporation” need not to be given anyPage 24
24
restricted meaning. Going by the Expression of Interest invited from
interested parties for usage of the pipelines in the present case, the
pipeline was required to have such design capacity so as to offer on
common carrier basis. Thus the pipeline itself would be sub-serving
public interest. The length of the pipeline in question from Kakinada of
Gujarat is over 1470 kilometers and if the lands are to be acquired
under Land Acquisition Act at every stage, it would lead to enormous
escalation in costs to the detriment of public interest.
E. The PMP Act and the Rules provide sufficient guidelines relating
to computation of compensation and deposit thereof. Section 10(1) of
the PMP Act provides for compensation for diminution in market value
as well and thus adequately protects the interest of the land owners. In
any case, ninety percent of the compensation assessed to be payable to
land owners in the present case was already deposited. Meetings were
held with the land owners and the representatives of RGTIL and the
amount of compensation was arrived at. As against the prevailing rates
of Rs.13.40 per sq.mtr., the compensation was given at the rate of
Rs.181/- per sq.mtr. for lands falling in zones other than industrial zone
and the compensation was given at the rate of Rs.201/- per sq.mtr. in
respect of lands falling in industrial zone.Page 25
25
16. Under the provisions of the PMP Act, what is taken over or acquired is
the right of user to lay and maintain pipelines in the sub-soil of the land in
question. The provisions of the PMP Act get attracted upon the requisite
Notification having been made under Section 3. If it appears to the Central
Government that it is necessary in the public interest that for the transport of
petroleum or any minerals any pipeline be made and for the purposes of
laying such pipelines it is necessary to acquire the right of user in any land, it
may by Notification issued in exercise of power under Section 3 declare its
intention to acquire such right of user. The Act then provides for making of
objections by those interested in land, which objections are thereafter to be
dealt with by the Competent Authority. The report made by the Competent
Authority is then placed before the Central Government for appropriate
decision and after considering such report and the relevant material on record,
if the Central Government is satisfied that such land is required for laying any
pipeline for the transport of petroleum or any other mineral, it may declare by
Notification in the official gazette that the right of user in the land for laying
the pipeline be acquired. Upon the publication of such declaration under
Section 6 the right of user in the land so specified vests absolutely in the
Central Government or in the State Government or in the Corporation free
from all encumbrances. Thus what stands acquired is the right of user in the
land in question for laying pipeline for the transport of petroleum or anyPage 26
26
mineral and not the land itself. The Statement of Objects and Reasons throws
light on this facet of the matter and shows that although the land could be
acquired outright for laying such pipelines under the Land Acquisition Act,
1894, such procedure for acquisition would be costly. For instance, as the
facts of the present case disclose the pipeline from Kakinada to Jamnagar
would be over 1470 kilometers in length. If the lands were to be acquired
outright, it would lead to tremendous increase in costs finally reflecting in
escalation of the costs of petroleum or minerals. At the same time, if at every
stage outright acquisition is to be insisted upon, many agriculturists would
stand deprived of their holdings causing great prejudice. The Act is thus
designed to achieve the purpose of laying of the pipelines for petroleum and
minerals as “efficient and cheap means of transportation and distribution of
petroleum and petroleum products”. At the same time Section 18 specifically
lays down that the provisions of the PMP Act shall be in addition and not in
derogation to any other law for the time being in force relating to acquisition
of land. Thus in a given case where the circumstances and the occasions so
demand, a resort could still be taken to acquire the lands by relying upon the
general law of acquisition under the provisions of the Land Acquisition Act,
1894. For instance, for monitoring the pressure gauges or in cases where
pipelines are branching in different directions, implementations to regulate the
flow may require permanent establishments necessitating acquisition of thePage 27
27
land itself rather than acquisition of a mere right of user. The PMP Act is thus
a special enactment designed to achieve the purpose of laying pipelines as
efficient means of transportation and with this idea it is only the right of user
in the land to lay such pipelines is acquired.
17. Section 7 stipulates that no pipeline be laid under any land which,
immediately before the date of Notification under Section 3(1) was used for
residential purposes, or any land on which there is permanent structure in
existence or any land which is appurtenant to a dwelling house. It is clear that
only such lands are to be considered for acquisition of right of user therein
which are either lying fallow or are being put to agricultural use. It is obvious
that care is taken to cause least possible damage to the holdings of the
concerned land-owners. According to Section 9, after the pipelines are laid,
the owner/occupier could use the land for the purpose for which it was being
used before the Notification under Section 3(1) was issued. Section 9
certainly, imposes some restrictions in the sense that such owner/occupier
cannot thereafter construct any building or any other structure or construct or
excavate any lake, reservoir or dam or plant any tree on such land. Barring
such restrictions, the owner/occupier is within his rights to use the land for the
same purpose for which the land was earlier being used. The point is clear
that neither the ownership in respect of the land itself nor the right to occupy
or possess that land is taken over permanently and those rights continue to
remain with the owner/occupier. What is taken over is only the right of user
namely to lay pipelines in the sub-soil of the land in question and the
restrictions imposed by Section 9 are designed to safeguard and secure the
pipelines underneath.
18. As laid down by this Court in Jilubhai Nanbhai Khachar and others
(Supra), the term property in legal sense means an aggregate of rights which
are guaranteed and protected by law and would extend to entirety or group of
rights inhering in a person. It was observed by this Court as under:
“42. Property in legal sense means an aggregate of rights
which are guaranteed and protected by law. It extends to every
species of valuable right and interest, more particularly,
ownership and exclusive right to a thing, the right to dispose of
the thing in every legal way, to possess it, to use it, and to
exclude everyone else from interfering with it. The dominion or
indefinite right of use or disposition which one may lawfully
exercise over particular things or subjects is called property. The
exclusive right of possessing, enjoying, and disposing of a thing
is property in legal parameters. Therefore, the word ‘property’
connotes everything which is subject of ownership, corporeal or
incorporeal, tangible or intangible, visible or invisible, real or
personal; everything that has an exchangeable value or which
goes to make up wealth or estate or status. Property, therefore,
within the constitutional protection, denotes group of rights
inhering citizen’s relation to physical thing, as right to possess,
use and dispose of it in accordance with law. In Ramanatha
Aiyar’s The Law Lexicon, Reprint Edn., 1987, at p.1031, it is
stated that the property is the most comprehensive of all terms
which can be used, inasmuch as it is indicative and descriptive of
every possible interest which the party can have. The term
property has a most extensive signification, and, according to its
legal definition, consists in free use, enjoyment, and disposition
by a person of all his acquisitions, without any control or
diminution, save only by the laws of the land.”Page 29
29
19. We therefore proceed on the premise that the right of user sought to be
taken over under the provisions of the PMP Act amounts to acquisition of one
of the facets of property rights which inher in the owner/occupier. For the
acquisition of such right of user, the compensation is prescribed in terms of
Section 10 of the PMP Act. There are two elements of compensation under
Section 10. The first part deals with any damage, loss or injury sustained by
any owner/occupier as a result of exercise of powers conferred by Sections
4,7 and 8 of the PMP Act that is to say the actual damage, loss or injury
sustained because of entry upon and/or digging or marking levels and survey
of land under Section 4 or while actual laying of the pipeline including
digging of trenches and carrying of requisite material for such operations
under Section 7 or at any stage of maintenance, examinations, repairing and
altering or removing of pipeline in terms of Section 8 of the PMP Act. The
measure for determining such compensation is given with sufficient clarity in
sub-section (3) of Section (10). The idea is to compensate the owner/occupier
for actual damage, loss or injury sustained by him as a result of the operations
carried out in terms of Section 4, Section 7 or Section 8 of the Act. One of
the indicia under sub-Section 3 could be “any injury to any other property
whether movable or immovable, or the earnings of such persons in any other
manner”. All possible acts as a result of which the damage, loss or injury
could be so occasioned are taken care of and stipulated in said sub-section.
Over and above such compensation for actual damage, loss or injury,
additional compensation @ 10% of the market value of the land is given to
the owner/occupier under sub-section 4 of Section 10 for taking over the right
of user to lay the pipelines. This element of additional compensation is
independent of any actual loss or damage and is purely linked to the value of
the land for the purposes of computation. This element of compensation is
purely for acquisition of right of user simplicitor. The damage/loss or injury
to the property is separately dealt with under first part of Section 10 and has
to be compensated in toto. Theoretically, it is possible that in a barren piece
of land as a result of exercise of powers under Sections 4, 6 and 7 there may
not be any damage/loss or injury. However compensation under sub-section
(4) for acquisition of right of user would still be independently payable. The
expression “in addition to the compensation, if any, payable under sub-section
(1)” clearly shows the intent that the compensation for acquisition of right of
user shall be in addition to the actual damage/loss or injury under first part of
Section 10. This part will also be clear from para (iii) of Statement of Objects
and Reasons extracted above.
20. The provisions of PMP Act do specify the principles and the manner in
which the compensation is to be determined. Not only the actual damage,
loss or injury suffered as a result of exercise of various activities in terms ofPage 31
31
Sections 4, 6 and 7 are compensated in toto but additionally compensation
linked to the market value of land is also to be given for acquisition of right of
user in respect of such land. What is taken over is mere right of user to lay
the pipeline in the sub-soil of land in question, leaving the title to the land as
well as the right to possess that land intact in the hands of the land
owner/occupier. It is no doubt that the enjoyment thereof after the pipelines
are laid is impaired to a certain extent, in that the owner/occupier cannot raise
any permanent construction or cause any excavation or plant any trees.
Barring such restrictions, the enjoyment and the right of possession remains
unaltered. The lands under which the pipeline would be laid are primarily,
going by the mandate of Section 7, agricultural or fallow and there would
normally be no occasion for any rendering of the holding completely unfit for
any operations. Even in such cases where the holding is rendered unfit,
sub-section 3(iii) of Section 10 could be relied upon and any diminution in
market value as permanent impairment could sustain a claim for
compensation. The principles of compensation as detailed in the PMP Act are
thus reasonable and cannot in any way be termed as illusory. The principle
laid down in H.D. Vora v. State of Maharashtra (Supra) has no application at
all.
21. Coming to the facts of the present case, Block Nos.331, 342 and 364 of
village Gothan were agricultural lands and recorded so in the revenue recordsPage 32
32
on the day the Notification under Section 3(1) was issued. The permission to
convert Block Nos.342 and 364 to non-agricultural use was granted after such
Notification. In any case, the compensation including damages, was arrived
at by consent in the meeting held with the land owners/occupiers and
determined at the level of Rs.181/- per sq.mtr. for lands other than those
falling in industrial zone and in respect of those falling in industrial zone, the
compensation was at Rs.201/- per sq.mtr. If the average rate at which the
lands were sold in preceding five years was taken into account, this
compensation was not inadequate. In any case, while the matter was pending
in the High Court, provisional compensation @ Rs.300/- per sq.mtr. was
deposited with the competent authority. This compensation in our view, for
acquisition of right of user cannot be called inadequate or illusory on any
count.
22. We now turn to the submissions advanced with respect to the terms
“Corporation” and “Competent Authority” under the PMP Act.
23. Natural gas is one of the most important and environment friendly
sources of energy. Easy access to the deposits of natural gas and quick and
cost effective transportation thereof are critical for fulfilling basic necessities
of the society. Petroleum and Natural Gas Regulatory Board Act, 2006
enacted by Parliament creates Petroleum and Natural Gas Regulatory BoardPage 33
33
to authorize entities to lay, build, operate or expand to a common carrier or
contract carrier; regulate access to common carrier or contract carrier;
regulate transport rates and ensure adequate availability of natural gas and
secure equitable distribution for petroleum products. The activity of
transportation of gas is thus recognized as an activity of highest national
importance and subjected to statutory control in all its dimensions.
Transportation of natural gas requires creation of necessary infrastructure
either by the State on its own or through private enterprise. The pipeline in
question was designed to sub-serve public interest and as rightly contended by
the learned Solicitor General the element of public interest is present all
through, even when the activity is undertaken through an entity in private
sector. Considering the nature of activity where entities in private sector are
encouraged to participate, it would be incorrect to put any restricted meaning
as regards the expression “Corporation”. The definition of “Corporation”
under Section 2(b) of the PMP Act is wide enough to include entities
in private sector. This definition is designedly kept wide enough to include all
such possibilities and there is no reason for giving any restricted meaning to
such expression. We, therefore, reject the submission advanced by the
appellants.
24. As per Section 2(a) of the PMP Act, “Competent Authority” means any
person or authority authorized by the Central Government to performPage 34
34
functions of the Competent Authority under that PMP Act. According to
Section 5, all objections preferred by interested persons to the laying of the
pipeline are to be dealt with and heard by the Competent Authority, who may
allow or disallow such objections. Under Section 5(3) the order so passed by
the Competent Authority is to be final. As per Section 6, the Competent
Authority thereafter has to make a report to the Central Government
containing his recommendations on the objections together with the record of
the proceedings held by him. After the order is passed by the Central
Government under Section 6(1), the role of the Competent Authority is to
assess compensation for damage, loss or injury occasioned to any person as a
result of exercise of the powers conferred under Sections 4, 7 and 8. Section
10(3) obliges the Competent Authority inter alia to have due regard to facets
enumerated in sub clauses (i), (ii) and (iii) of Section 10 (3). In addition, the
Competent Authority is also to determine the market value of the land, 10%
of which is required to be paid by way of compensation for acquisition of
right of user under Section 10 (4). Section 12 confers powers of Civil Court
on the Competent Authority.
25. It is thus clear that “Competent Authority” is given wide ranging
powers under Section 5 for considering the objections, under Section 6 for
making the report to the Central Government and under Section 10 for
determining compensation for damage/loss or injury under first part ofPage 35
35
Section and to determine the market value under the second part of the
Section. By virtue of these powers, crucial rights of the persons interested in
the land are bound to be affected. His orders and report would certainly deal
with variety of civil rights of the interested persons and issues pertaining to
compensation. At this stage, the observations of this Court in Trilok
Sudhirbhai Pandya (Supra), in the context whether the person appointed as
Competent Authority could be a person other than a public servant are quite
eloquent:-
“17. The aforesaid reference to the various provisions of
the Act shows that the competent authority has got vast powers,
which affects the rights of persons interested in the land over
which the pipeline is to be laid and on the reports of the
competent authority, the Central Government and the State
Government are to take decisions affecting the rights of persons
interested in the land. Under the provisions of the Act, therefore,
the competent authority does not merely determine the
compensation at the first instance in accordance with the
statutory rules as has been contended by the learned counsel for
Respondent 4, but has to perform various other quasi-judicial
functions which are normally performed by public servants
whose pay allowances and other incidentals of service are met
out of the public exchequer. If instead of public servants, a
person is appointed whose pay, allowances and other incidentals
are not paid out of the public exchequer but directly paid by a
private employer such as Respondent 4, for whom the right of
user is being acquired and by whom the compensation is
payable, persons interested in the land will have reasonable
grounds for assuming that such a competent authority, who is
dependent on a private corporation for his salary, allowances,
accommodation and transport allowances, will have a bias in
favour of the private corporation.”Page 36
36
26. It is axiomatic that a person who occupies the position of Competent
Authority under the PMP Act must evoke and enjoy public confidence.
Neither the Act nor the Rules framed thereunder deal with the qualifications
required of a person before his appointment as Competent Authority nor do
they deal with any transparent process for such appointment. We may now
turn to see the requirements in that behalf in an enactment which is pari
materia. Section 2(e) of the Metro Railway (Construction of Works) Act,
1978 (Metro Act, for short), defines Competent Authority as the one
appointed under Section 16. Section 16(2) then sets out, “a person shall not
be qualified for appointment as a Competent Authority unless he is holding,
or has held, a Judicial Office, not lower in rank than that of a Subordinate
Judge.” Like the PMP Act, the Metro Act also confers power upon the
Competent Authority therein to consider objections to the construction of the
Metro Railway or any other work and to determine the amount payable for
acquisition. The orders passed by the Competent Authority under the Metro
Act are also appealable before an Appellate Authority. In our view, the
Competent Authority under the provisions of the PMP Act must also be
someone who is holding or has held a Judicial Office not lower in rank than
that of a Subordinate Judge or is a trained legal mind. If such requirement is
not read into and not taken as an integral and essential qualification before
appointment of any person as Competent Authority, the provisions in thatPage 37
37
behalf will not be consistent with the doctrine of fairness under Article 14 of
the Constitution of India. At the same time, we hasten to add that actions
taken by the Competent Authority till now, will not in any way stand impaired
or be invalidated purely on this count. But the Central Government may do
well to step in immediately and remedy the situation with appropriate
measures.
27. Lastly, it is correct that the PMP Act and the Rules framed thereunder
do not stipulate any period within which compensation for damage, loss or
injury and compensation for acquisition of right of user is to be deposited.
While damage, loss or injury occasioned as a result of exercise of power
under Sections 4 and 7 could be one time damage, that in respect of Section 8
could re-occur as a result of repeated entries for maintenance. Even when no
time limit is fixed, it is expected of the concerned authorities to determine and
deposit compensation within reasonable time. In so far as the facts of the
present case are concerned, ninety percent of the amount so determined by the
Competent Authority in the first instance, was deposited in advance.
28. We thus do not find the provisions regarding computation of
compensation with regard to both elements under Section 10 of the PMP Act
to be invalid on any count. We further find that the definition “Corporation”
is wide enough to take within its sweep entities in private sector as well. We
also do not find the provisions of the PMP Act to be lacking on any count,
except to the extent indicated above as regards appointment of Competent
Authority. Civil Appeals are thus disposed of without any order as to costs.
…………………….…J.
(V. Gopala Gowda)
..…………..…….……J.
(Uday Umesh Lalit)
New Delhi,
October 05, 2016
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