On Friday(20th Sept), The Supreme Court criticized the Himachal Pradesh government for not compensating six landowners in Solan district before acquiring their land for a safety zone around a cement plant. The court ordered the state to pay Rs 3.05 crore to the affected landowners within 15 days, deeming the situation “regrettable.”
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NEW DELHI: On Friday(20th Sept), The Supreme Court expressed its deep displeasure towards the Himachal Pradesh government for failing to compensate six landowners in Solan district before taking possession of their land. The land in question had been acquired to create a safety zone around a cement plant and adjacent mining areas. The court described the situation as “regrettable” and criticized the state’s inaction, emphasizing its duty as a welfare state to ensure timely compensation.
The court ordered the Himachal Pradesh government to pay a total of Rs 3.05 crore to the affected landowners within 15 days.
A bench comprising Justices J B Pardiwala and Manoj Misra, while delivering the verdict, stressed that it was the state’s responsibility, as a welfare state, to protect the interests of its citizens, especially when their land is acquired. The court noted that the government had neglected its duty in this case, prolonging the plight of the landowners.
The bench remarked:
“We regret to observe that the compensation amount of Rs 3,05,31,095 determined under the supplementary award has not been disbursed to the landowners for over two years, and the Himachal Pradesh government, as a welfare state, has not made any efforts to ensure timely payment.”
This statement highlighted the court’s concern over the long-standing delay in payment and the government’s failure to take any proactive steps to address the issue. The justices made it clear that the state’s indifference towards the situation was in violation of the constitutional rights of the landowners.
The Supreme Court’s decision came as a result of an appeal filed by M/s UltraTech Cement Ltd, which was challenging the Himachal Pradesh High Court’s July 2022 order. The High Court had directed UltraTech Cement Ltd to pay the compensation amount to the landowners, as determined in the supplementary award dated May 2, 2022. However, the high court had given the company the liberty to recover this amount from Jaiprakash Associates Limited (JAL) if the legal relationship between the two entities allowed it.
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The crux of the matter lay in the transfer of ownership between JAL and UltraTech Cement Ltd. The cement project for which the land had been acquired was initially managed by JAL, which later entered into an agreement with UltraTech Cement Ltd to transfer the project.
However, as noted by the apex court:
“We acknowledge that the subject land was not included in the list of assets transferred to the appellant (UltraTech Cement Ltd) under the scheme and remains under the ownership of JAL to this day.”
This observation made it clear that while the project had been transferred to UltraTech, the land in question was still owned by JAL, which added complexity to the compensation dispute.
The bench took a firm stand on the responsibilities of a welfare state, stating that the Himachal Pradesh government had an obligation to ensure compensation was paid before the land was taken from its owners. This is in line with Article 300A of the Indian Constitution, which guarantees that no person can be deprived of their property without proper legal authority.
The court’s ruling underscored this principle:
“In these unique circumstances, the state government was expected to pay the compensation to the landowners from its own treasury and should have subsequently sought reimbursement from JAL.”
The court added that the state should not have allowed the landowners to struggle against powerful corporate entities like JAL. Instead, it was the state’s duty to ensure that JAL made the necessary payments or to intervene directly by paying the compensation from state funds.
“Rather than making the vulnerable landowners pursue powerful corporate entities, the government should have required JAL to make the necessary payment.”
The court called it “regrettable” that the state government had failed in its duty by not ensuring the compensation was paid prior to the possession of the land.
The Supreme Court also rejected JAL’s argument that UltraTech Cement Ltd should be responsible for paying the compensation, as the land was crucial to the cement project. The court emphasized that disputes over ownership could not interfere with the rightful claim of the original landowners to receive compensation.
“Thus, JAL’s argument that the appellant (UltraTech Cement Ltd) should pay the amount specified in the supplementary award, claiming the subject land was essential to the cement project, is rejected.”
– the bench stated emphatically.
By clarifying this, the court ensured that corporate legal disputes did not further delay the landowners’ right to compensation.
The apex court’s judgment set aside the Himachal Pradesh High Court’s order and directed the state government, along with the Land Acquisition Collector, Arki, to immediately pay the compensation amount of Rs 3.05 crore to the six landowners. The court also ordered that the state should recover the amount from JAL.
“The total amount paid by the state shall be recovered from respondent no. 11 (JAL),”
-the court ruled, effectively placing the financial burden back on JAL.
