Odisha’s 6000 families to get their land back as SC quashes acquisition of 6000 acres of agricultural land for Anil Agarwal Foundation's Vedanta University project

Vedanta University

Supreme Court: In a big blow to the Anil Agarwal Foundation, the bench of MR Shah* and Krishna Murari, JJ has quashed the acquision of about 6000 acres of land, belonging to about 6000 families, affecting approximately 30,000 people, to set up Vedanta University in Odisha. The Court also rejected the proposal of confining the acquisition of 3837 acres of land only and observed,

“The lands to be acquired are agricultural lands belonging to 6000 families and their only source of livelihood is on the agricultural lands, which cannot be compensated in terms of money, therefore, the proposal made now has to be rejected outright.”

The Court also imposed a cost of Rs. 5 Lakhs on the Anil Agarwal Foundation.

Orissa High Court judgment on Vedanta University Land Acquisition

The Foundation had approached the Supreme Court after the Orissa High Court has quashed the land acquisition proceedings and had directed that the possession of the acquired lands shall be restored to the respective landowners and on restoration of the possession to the landowners, they shall refund the amounts received by them as compensation or otherwise in respect of their lands. The High Court had also quashed the grant of Government Land in favour of the beneficiary company under Rule 5 of the Government Land Settlement Rules with a direction to the State Government to resume the lands which were granted to the beneficiary company by way of lease, the appellant — the beneficiary company and others have preferred the present appeals.

‘Private' Vedanta became' Public' Anil Agarwal Foundation, within a matter of months

The entire acquisition proceeding came to be initiated in April 2006 at the instance of the Vedanta Foundation and thereafter by the Anil Agarwal Foundation, which admittedly at the relevant time was a private company. It subsequently converted to public company as on 13.12.2006.

The Court noted that subsequent alleged conversion from private company to public company was an attempt to get out of the statutory provision under the Land Acquisition Act, 1894. The Law Department specifically observed that the land cannot be acquired by private company for the purposes for which the lands were sought to be acquired, only thereafter the appellants changed the status of the company from private company to public company. The aforesaid was a mala fide exercise on the part of the appellants.

From 15000 acres to settling for 3837 acres — A case of exaggerated demand

It is also to be noted that initially 15,000 acres was proposed to be acquired, which was eventually reduced to 3837 acres when the matter travelled to the Supreme Court. The Court, hence, noticed that the proposal was for exaggerated demand and with mala fide intention on the part of the foundation.

Vedanta University nowhere to be found

The Court also took note of the fact that even at the relevant time, the University in question was/is non-existent as no university has come into existence under the University Grants Commission Act, 1956 nor under the Orrisa Universities Act. While it was argued that the State legislature has already passed a bill to establish the university, the Court observed that it is ‘neither here nor there' as the same is pending assent of the Governor.

State's “undue favours”

The Court came down heavily upon the State Government a huge tract of land to the extent of approximately 7000 acres of agricultural lands in utter disregard to the relevant provisions of Land Acquisition Act, 1894 and the Rules, 1963. The lands in question acquired for the beneficiary foundation / company / trust was acquired for the proposed university in a prime location just adjacent to the Wildlife Sanctuary and from the lands in question acquired, two small rivers belonging to the State / acquired by the State are passing.

The Court noted that as such the entire initiation of land acquisition proceedings and even right from selection of the land was by the Foundation and not by the State Government.

It was also noticed that undue benefits were proposed and in fact offered and given to the Foundation providing undue largesse like:-

(i) total autonomy to Vedanta University and its authorities with regard to administration, admission, fee structure, curriculum and faculty selection;

(ii) proposed university to have complete immunity from any reservation laws of the State Government;

(iii) all assistance in getting regulatory approvals from UGC, AICTE etc.;

(iv) the Government agreed to provide 4-lane road from Bhubaneshwar city to the proposed site;

(v) in the agreement, the Government also agreed to make the land use/ zoning plan in the 5 km radius from the university boundary only after Consultation with Vedanta;

(vi) the Government also promised to exempt all state levies/ taxes/ duties namely, viz. VAT, Works Contract Tax, Stamp Duty and Entry tax on R&D equipment, educational aids, lab equipment and tools, and construction materials from the date of signing of the MoU;

(vii) the Government also promised to assist the Foundation in obtaining NOC from SPCB and all clearances from the Central Government;

(viii) the Government also promised to assist the Foundation in arranging rapid EIA and EMP for the project;

(ix) the Government also promised to provide extraordinary huge amounts of electricity and water.

The Court was unable to fathom as to why the Government offered such an undue favour in favour of one trust/ company. Thus, it was observed,

“The entire acquisition proceedings and the benefits, which were proposed by the State Government were vitiated by favourism and violative of Article 14 of the Constitution of India.”

Disregard of Environmental aspects by State

From the lands in question two rivers namely ‘Nuanai' and ‘Nala' are flowing, which as such were acquired by the State Government. Noting this, the Court observed,

“How the maintenance of the rivers etc. can be handed over to the beneficiary company. If the lands in question are continued to be acquired by the beneficiary company, the control of the rivers would be with the said private company, which would violate the Doctrine of Public Trust. Even requiring the beneficiary company to maintain the flow of above two rivers may also affect the residents of the locality at large.”

Also, just across the road, there is a Wildlife Sanctuary. The large-scale construction for the establishment of the Vedanta university will also adversely affect the Wildlife Sanctuary, entire Eco system and the ecological environment in the locality.

“It is a duty of the State to protect the Wildlife Sanctuary and it may affect the entire Eco system and the ecological environment in the locality. It is also required to be noted that even the distance of the sea from the proposed Vedanta University is approximately 2000 meters. Merely because the Balukhand Wildlife Sanctuary is separated from the proposed site by a highway — Puri-Konark Marine Drive, cannot be a ground to acquire the huge lands for the proposed university.”

[Anil Agarwal Foundation v. State of Orissa, 2023 SCC OnLine SC 407, decided on 12-04-2023]

*Judgment authored by Justice MR Shah

Know Thy Judge | Justice M. R. Shah

Advocates who appeared in this case :

Mr. P. S. Sudheer, AOR Mr. Abhisth Kumar, AOR Mr. Prashant Bhushan, Adv. Mr. Pranav Sachdeva, Adv. Mr. Chinamaya Mishra, Adv. Mr. Ajit Pudussery, AOR Mr. Milind Kumar, AOR Mr. Rutwik Panda, AOR Ms. Nikhar Berry, Adv. Ms. Anshu Malik, Adv. Mr. Raj Kumar Mehta, AOR Mr. Arvind Kumar Sharma, AOR Ms. Ruchi Kohli, AOR Mr. Shibashish Misra, AOR

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